Why the Lowest Mortgage Rate Could Cost You Thousands

Why the Lowest Mortgage Rate Could Cost You Thousands

As a loan officer, many borrowers tell me they want the lowest possible interest rate. I listen carefully, and then I begin to ask questions.  Experience has shown me that the lowest possible interest rate could actually end up costing borrowers thousands of dollars!


JSRealty4U Mortgage Lowest Rate Real EstateMany borrowers will scour the internet for the lowest possible mortgage rates. Low rates will indeed pop up, but most often they won’t apply to most borrowers. The rates may assume a very high credit score, a large down payment, or even the cost of paying discount points to get the advertised rates. Many of the low rates that are advertised are also coming from mortgage brokers. Typically, mortgage brokers are third parties that have relationships with multiple investors. This means they can “shop around” for the lowest rates when it is time to lock in. Because the broker is a third party, they don’t control the processing and underwriting aspects of the loan. If something unusual is found during the loan process, many times the issue is not communicated immediately and causes loans to close late. Once a sale is postponed due to loan issues, the buyer can face the possibility of losing their earnest money deposit and can be sued for damages by the seller. This is why lower rates aren’t always the best way to go for a borrower.


JSRealty4U variable mortgage rates lowestGenerally, an adjustable rate mortgage (ARM) will offer lower rates than a 30 year fixed rate mortgage with the shortest term on the ARM offering the lowest rate. For example, a 5/1 ARM may have a rate of 3.375% while a 30 year fixed loan may be at 3.75%. The monthly payment for the ARM will be less than the 30 year fixed rate for the first 5 years. After five years, the rate will adjust based on the then current market. Since rates today are close to the lowest ever, it is likely that in five years the interest rate will soar – causing the monthly payment to skyrocket!


JSRealty4U lender man mortgage assumption lowest rateFHA loans also offer lower rates than a conventional loan. Currently, a conforming FHA loan may offer a rate of 3.375% with the corresponding conventional loan offering the same 3.75% as in the previous example. The difference is the FHA loan adds an additional 1.75% to the loan amount in what is referred to as an “Upfront Mortgage Insurance” premium. The FHA loan also has a monthly mortgage insurance premium that remains on the loan for as long as you own it. The rate for this monthly mortgage insurance payment is most often much higher than a corresponding monthly mortgage payment on a conventional loan. The result: a higher monthly payment on a loan with a lower interest rate.


JSRealty4U paper deposit real estate lowest mortgageAnother thing to factor in is Mortgage insurance. Mortgage insurance comes into play when a purchaser is putting less than 20% down on their desired home. There are a couple of ways in which the mortgage insurance can be paid. One way is to make monthly mortgage insurance payments. If making the minimum payment required each month by the lender, these mortgage insurance payments continue until the loan-to-value reaches 78%. In the case of a beginning loan-to-value of 95%, these payments may take as much as 9 years before reaching the 78% threshold where the payments stop.  The second method of dealing with mortgage insurance is to have the lender pay for the mortgage insurance premium. This results in a higher interest rate – but no mortgage insurance payment. The overall monthly payment will be lower on this option even though the rate may be up to .5% higher. Paying even $25 more each month for 9 years will cost the borrower $2,700!


JSRealty4U mortgage rate lowestIt is always important to let a lender help you determine the best possible loan solution. Some of the most important factors for the loan officer to know are:

  • Monthly Income
  • Monthly debt
  • Credit score
  • Credit history
  • Cash available for down payments and closing costs
  • Length of time you expect to own the loan

With this information, your loan officer should be able to provide multiple loan options. In addition, they should provide explanations as to why one would be preferred over another. And more often than not the loan with the higher interest rate becomes the best long term solution!

Thinking about buying or refinancing a home? Make sure you speak to a lender first! You can reach Keith Harris, Senior Loan Officer at Intercoastal Mortgage Company online or by calling 703.259.0788.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Word of the Week: Blanket Mortgage

What is a Blanket Mortgage?

A Blanket Mortgage is a loan where the borrower offers up more than one parcel of real estate as security (collateral) for the debt.jsrealty4u blanket mortgage

This is a popular option for Builders and Developers who commonly buy large amounts of land. They will often divide the land up into multiple, individual lots and sell the lots off one by one. Instead of getting a new loan each time one of the lots is sold, the borrower will use the Blanket Mortgage loan to buy them all at once. A Blanket Mortgage will usually contain a “release clause” as well. This means when an individual lot is sold, that portion of the mortgage is released (paid back to the lender). The loan is then adjusted and continues on in this manner until all of the lots are sold and the entire mortgage has been repaid.

With access to multiple lenders and extensive experience in Residential and Commercial Real Estate, our Team of Real Estate Professionals is available to lead you to great Real Estate solutions! Contact us today so we can help you realize your Real Estate goals.

Word of the Week: Amoritzation

Defining Mortgage Amortization and Options

Simply put, amortization is a loan that is paid off with a fixed repayment schedule in regular installments over a period of time. Payments may be Fully or Partially Amortized.jsrealty4u amortization

Full Amortization

Full amortization is an organized method of repaying a loan by making regular, equal payments. With this method, the loan – or principal – and all of the interest on the loan, is reduced to zero by the loan’s maturity. Traditionally, the payments are made on a monthly basis. And while each payment remains the same, the amount of interest and principal paid each month fluctuates.jsrealty4u loan mortgage amortization

Partial Amortization

jsrealty4u mortgage loans amortization balloonPartially amortized loans are a series of amortized payments followed by a “balloon payment” (or lump sum) at the loan’s maturity. The balloon payment is the entire remaining balance. A partially amortized mortgage provides much lower monthly repayments, however a massive final payment is due at the end of the contract. Under a partially amortized mortgage, the final payment is larger than any previous payment as it “balloons” on the last installment. This type of payment is often found in commercial lending arrangements. The lower monthly payments can be helpful while the commercial project grows and, the developer hopes, appreciates.

Full or Partial – Which is best for You?

JS Realty jsrealty4u loans amortizationNot sure which type of amortization is right for you? Contact our good friend and Lender, Keith Harris (NMLS ID #: 838973). Keith is committed to spending the necessary time to understanding his clients needs and will tailor a loan best suited for YOU. From mortgage rates to refinancing, Keith and his team at Intercoastal Mortgage can find the best solution for you and your family.

House Hunting – Why a Lender Should Be Your First Call

Top 6 Reasons to Contact a Lender BEFORE House Hunting

Searching for a new home can be an exciting time. The right location, the right neighborhood, the right features – these are all at the top of a potential homeowners list. But the last thing you want is to find your dream home and then discover it’s well out of your price range. So we asked our Lender buddy Keith Harris to break down why it’s so important to speak to a Lender (and get pre-approvedbefore you start house hunting.

Know Your Price Range

JS Realty Refinance Monney Calculator Bills House HuntingYou can get an idea of what you can afford based on monthly income and monthly debt. Most loans have a maximum debt-to-income ratio for qualification purposes. The mortgage industry uses a borrower’s GROSS monthly income as a basis for this ratio. Most borrowers don’t know their monthly debts and usually think it is higher than what the industry may calculate. For example, if a borrower has 3 credit cards with a total outstanding balance of $900, what is their monthly debt? Many consumers might think their monthly debt is $900. In reality, it would be the total of the monthly minimum payment for all three cards and could be as little as $25 per card – or $75.

Know Your Credit Issues

JS Realty credit score house huntingOnce a credit report is run, a number of potential issues may surface. You may have a score that is preventing you from qualifying for certain loans due to a creditor reporting inaccurate information on your credit report. You may have a high balance on a credit card that is impacting your credit score. If you need time to remedy these issues, you can address them early on so that a purchase settlement is not delayed.

Loan Programs

Lender loan jsrealty4uThere are potentially many loan programs available to you as a borrower. A sample list may include Conventional, High-Balance, VA, FHA, VHDA, USDA, Jumbo, primary residence, investment properties, etc. Some of these require little or no money down, whereas some may require a minimum down payment of 20% or more. It is not fair to assume that your Realtor will know all of the requirements for loan qualification. Perhaps you had a short sale 3 years ago – if that’s the case, you may only qualify for an FHA loan based on that information.

Have a Competitive Edge

JS Realty approved credit house huntingYou may have a competitive advantage over other buyers if there are multiple offers on a property. If you have filled out a loan application and your lender has run your credit report, you can obtain a conditional loan approval letter from your lender. If you are interested in a sought after property, you may be able to submit an offer with a closing date weeks earlier than if you had not spoken to a lender. The approval letter can also be strong enough to convince the seller that your offer is the best and safest of all the competing offers.

Be More Efficient

Your lender can tell you all of the information that may be needed to process and approve your loan. You can begin gathering this information ahead of time so that the loan process can be as efficient as possible.

Less Stress!

jsrealty4u loans lender house huntingIf you need to liquidate funds for closing, obtain a gift from a family member or provide documentation that is not readily available, you can be made aware of these needs well in advance. We all have enough stress in our daily lives to not have to have added pressure of trying to get qualified for a loan in a short period of time.

If you’re thinking about house hunting and would like to know more about prequalifying for a loan, contact Keith Harris  at 703-259-0788 or apply online here.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Brexit and US Mortgage Rates

The Effect of Brexit on Mortgage Rates in the United States

JS Realty Interest Rates brexitOn June 24, 2016, England voted to leave the European Union. This historic decision, referred to as “Brexit”, has caused a ripple effect here in the United States. It has driven interest rates down to their lowest mark in three years. Mortgage interest rates will fluctuate most directly due to the cost of mortgage backed securities. When mortgage bond prices go up, interest rate tend to fall and when mortgage bond prices drop, mortgage rates will rise. In addition to this correlation, the overall US economy will also influence mortgage rates.

GJS Realty Opposite directions brexitenerally speaking, when the economic indicators such as the stock market, inflation, and unemployment are positive, mortgage interest rates will rise. When the economic indicators suggest our economy is not prospering, rates will drop.

In December of last year, the Federal Reserve projected that it would raise interest rates up to four times in 2016. On June 15, 2016, Federal Reserve Chairperson, Janet Yellen decided NOT to raise rates. This was due to a very weak employment report in May.

Brexit has caused severe volatility in the global stock markets and has had a negative impact on the stock market here in the United States. No one knows what the long term impact of Brexit will be, but it is safe to say that the immediate impact of England’s decision to leave the European Union has directly led to lower interest rates.brexit

If you are considering buying a home, or if you currently have a mortgage and are considering a refinance, right now is a perfect time to get a mortgage loan evaluation from a licensed mortgage professional.

Not sure where to start? Click here to contact Senior Loan Officer Keith Harris or to get pre-qualified.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Documents Needed for a Mortgage

What documents are needed for a mortgage loan approval?

Years ago there was actually a no documents loan process for certain types of loans. Those are not applicable in today’s world of mortgage lending. Today we’re providing you with a list of documents that are needed for final loan approval. Some documents are required whether the loan is for a purchase or a refinance; others are pertinent to a specific type of loan.JS Realty documents sign pen woman

Documents needed for either a purchase or refinance are as follows:

  1. Most recent pay stubs, showing a 30-day period
  2. Past two years W-2 forms and/or 1099’s (if self-employed)
  3. Signed Federal Personal Tax Returns for past two years
  4. Signed Federal Business Tax returns if applicable
  5. Asset statements for a 2 month period, or most recent quarterly statement. This should include any and all of the following and must include ALL pages.
    • Checking
    • Savings
    • Stocks
    • Bonds
    • Mutual funds
    • Money Market
    • 401 K’s
    • IRA’s
  6. If the property is or will be held in a Trust, provide Trust documentation
  7. For Investment properties:
    • Lease agreement for rental properties
    • Mortgage statement
    • Property tax bill
    • Homeowner’s Insurance Policy
    • HOA or Condo fees, if applicable
  8. Hazard Insurance (homeowner’s insurance) Policy
  9. Complete Divorce/Separation Agreement /Property Settlement agreements, if applicable
  10. School Transcripts and Diploma if you are a recent graduate
  11. Contact name and phone number for Verification of Employment

For VA loans, the following is required:

  1. VA Certificate of Eligibility
  2. Original statement of service or DD-214

For Purchases only, we need the following:

  1. Ratified Sales contract
  2. Copy of Earnest Money Deposit AND bank statement showing the check has cleared your account
  3. Name, address and phone number of landlords for past 2 years if currently renting
  4. Sales Contract for existing home if selling and vacating to purchase new home
  5. Settlement Statement from the sale of current residence if vacating to purchase new home

For Refinances only

  1. Copy of most recent mortgage statement
  2. Copy of Owner’s Title Policy or settlement statement indicating that you have owner’s title insurance
  3. Copy of existing Homeowner’s Insurance Policy

Whether you’re purchasing or refinancing a property, you can download a copy of this List of Documents to help aid in your search for a loan. This list will be helpful to both you and your Lender as you work through the processing of your loan.

Mortgage Loan ABC’s

Understanding the most common types of mortgage loans available today

There are many choices when it comes to the types of mortgage loans you can apply for when buying a home. Each one comes with it’s own set of options, qualifications, and rules. But it’s important to understand the most common types of loans at their most basic level. Especially once your Lender starts talking about rates, points and qualifying ratios! So here are your options. It’s as simple as A, B, C, and F (hey, nothing is perfect).

So, what is a mortgage? By definition, a mortgage is a legal document that promises property to the lender as security for payment of a debt.jsrealty4u mortgage loan propertyA: Adjustable-Rate (ARM)
JS Realty variable mortgage ratesThis is a mortgage in which the interest rate floats up or down according to a specified index. The interest rate is “adjusted” at certain time intervals (such as six months or one year), usually having a “cap rate” or maximum rate of change per adjustment interval (such as 1%, or 4%). Terms such as “one year ARM” generally identify the adjustment interval (interest rate adjusted after one year).

B: Balloon
jsrealty4u mortgage loans balloonThis is a unique type of loan, as it is rather short. You make a monthly payment for 5 – 7 years, based on a term of 30 years. There’s often a low interest rate, and it can be easier to qualify for this versus a traditional 30-year-fixed. A balloon mortgage can be an excellent option for many home buyers. There is, however, a risk to consider. At the end of your 5-7 year loan term you will need to pay off the outstanding balance. This usually requires you to either refinance, sell your home, or convert the balloon mortgage to a traditional mortgage at the current interest rate.

C: Conventional
JS Realty Loan mortgageThese loans are neither insured nor guaranteed by the government. As such, conventional loans represent a greater risk to lenders than government backed loans. Conventional loans can start with as low as 5% down, but if you can put at least  a 20% down payment (80% LTV) you can avoid paying private mortgage insurance.

Federal Housing Administration loans are available to all types of borrowers, not just first-time buyers. You can read more about the differences between a conventional loan and an FHA loan in one of our previous blogs.

JS Realty Lock Interest Rate mortgageF: Fixed Rate
The most common type of home loan is the fixed-rate mortgage. The interest rate remains the same for the life of the loan, so the principal and interest remain the same, too. This is one of the best reasons to buy vs rent, as rents rise over time where as most mortgages stay constant for the life of the loan.

If you’re interested in learning more, or would like to apply for a loan, contact our preferred lender, Keith Harris.

Choosing a Lender: Local VS Online

When it comes to finding a lender for a mortgage loan, many borrowers take the same approach as with most other needs – they resort to the internet. This approach can be very fruitful, but it can also have some pitfalls. Today, we’re going to discuss some of the advantages of working with on-line lenders as well as advantages of working with local lenders.

Often times an on-line search for mortgages will result in finding mortgage brokers that are advertising very competitive rates. While getting the lowest interest rate is a goal for most borrowers, it may come with some unforeseen costs. Mortgage brokers usually have access to multiple investors so that they can “shop around” for low rates when it is time to lock in a loan for their borrowers. Generally speaking, the more investors they have access to, the better chances of getting a very competitive rate.

lender computer research jsrealty4uSo why not go on-line to find a mortgage broker that can offer a low interest rate? Because the rate is only part of the equation. Is the broker charging discount points to be able to offer such a good rate? If there are points involved, the lower rate could results in a worse financial scenario for the borrower.

Most mortgage brokers do not participate in the processing or underwriting of the loan. The mortgage broker is just a “middle man” that is paid to link a borrower with an investor and is left out of the most critical part of the loan approval process. They often gather the information from the loan application, along with supporting documentation, and then send it off to the investor so that they can process and underwrite the loan. Many times, the loan will have some “issues” that require additional documentation or explanations from the borrower. In some cases, the broker is not aware of any issues with the loan. Even worse, if they are aware of the issues, they have no control as to how the issues can be corrected or how long it may take to get the problem resolved.

Another important aspect of any loan is the appraised value of the property that is being used as collateral. If your mortgage broker is from a different part of the country, how do you know that they are using appraisers that have a keen understanding of the nuances of property values in the DC Metropolitan area? Just in Northern Virginia alone, property values for similar type homes can vary greatly by zip code, school district, and city. It is important that the appraisers understand these differences when compiling an appraisal report.

lender business people interview sell homeSometimes it is important to be able to have a face-to-face meeting between the lender and the borrower. Many borrowers would prefer to hand deliver valuable and sensitive personal financial information versus sending it via email or some other electronic format. In addition, it is also comforting for some borrowers to be able to shake hands with the people that will be making the determination of whether a loan of hundreds of thousands of dollars will be approved.

There are mortgage programs that are specific to a general area or state. Recently, VHDA was offering to pay 3% of a sales price to qualified borrowers purchasing a home in Virginia. The benefit to borrowers qualifying for this program could be as much as $15,000! Having knowledge of these types of programs is essential when determining the best loan solution for borrowers. It is unreasonable to expect a mortgage broker from another part of the country to know about specific programs in your area.

JS Realty Intercoastal MortgageIntercoastal Mortgage Company is a local lender with headquarters located in Fairfax, VA and has been providing residential loan solutions for the DC Metro area since 1987. Intercoastal Mortgage Company will fund loans that have been processed and underwritten “in house” at our Fairfax, VA location. Similar to mortgage brokers, Intercoastal Mortgage Company (ICM) has access to multiple investors which allow us to look at various outlets when locking in a rate for a borrower. If the borrower has good credit and income, it may be as simple as seeing which investor has the lowest rate at time of the loan lock. If the borrower has experienced credit challenges, a short sale or foreclosure, ICM has access to investors that will service loans of this type. Perhaps there are programs such as the VHDA grant program that can save thousands of dollars for the borrower. We work very hard to keep updated on all local loan programs.

Because the processing and underwriting is completed “in house”, ICM is able to meet closing dates that many mortgage brokers are unable to meet.

The appraisal process is completed by having access to multiple “local” appraisers that know the DC area very well. The “pool” of certified appraisers that ICM uses have all shown their knowledge of the local area for an extended period of time.

The chart below sums up the advantages of working with a local lender versus an online lender.


As you can see, a local lender can access multiple investors to offer very competitive rates, along with excellent service and timeliness that is extremely important in today’s lending environment.


JS Realty Keith Harris
Keith Harris
NMLS # 838973

Keith Harris
Senior Loan Officer
Office: 703-259-0788




Tax Advantages of Buying a Home

For many people, purchasing a home, or homes, is the single largest investment they will make in their lifetime.  It is a decision that will affect their finances, lifestyle, and family for years to come.  Because of this impact, it is important to consider all aspects of home buying, along with the pros and cons of the choices that are being made. Aside from the actual home buying process, a question most homeowners have is: “What are the tax advantages of buying a home?”


When considering a home purchase, one very big pro is the favorable tax JS Realty Mortgage Tax Advantagestreatment you are able to take advantage of on your individual tax return.  Deducting mortgage interest and real estate taxes is often what makes it more beneficial for taxpayers to itemize their deductions (rather than using the standard deduction); along with state income taxes paid.  This makes itemizing more advantageous. These deductions reduce taxable income, which in turn, reduces taxes due. Typically, personal interest, such as credit card or car loan interest paid is not deductible, but qualified residence interest (with a few restrictions) is fully deductible.

You can deduct the interest paid if you meet the following criteria:

–Your home is your principal residence (meaning that’s where you spend the majority of your time)
–The loan is $1 million or less, and secured by your home
–The loan proceeds were used to acquire the home, or were used to substantially improve your home

JS Realty lender man mortgage contractYou can also deduct the interest on a second home mortgage (such as a vacation or mountain home), as long as the second home mortgage amount, when combined with the principal residence mortgage, does not exceed a combined total loan amount of $1,000,000.  For example, if your principal residence mortgage equaled $700,000, and you purchased a second home with a mortgage of $600,000, you would be able to deduct the interest on your $700,000 principal residence mortgage and you would be able to deduct the interest on $300,000 of your second home mortgage ($1,000,000 – $700,000) for a total interest deduction on $1,000,000 of your mortgage balances.

JS Realty Mortgage Tax AdvantagesThe interest on home equity loan debt is also deductible.  The home equity loan interest deduction is the interest on a loan amount that is the lesser of the loan balance, up to a $100,000 loan, or the fair market value of the home minus acquisition indebtedness.  This interest is deductible for regular tax purposes, no matter the use for the money.  If the loan is not used to acquire the property or make substantial improvements to the property, then careful consideration should be made before securing consumer debt with your home.  If it is the right option for you, home equity loan debt can be used to purchase a new car, a vacation, a hot tub, consolidate credit card balances — whatever your heart desires.  The interest will be deductible for regular tax purposes, however the amounts are not deductible when calculating alternative minimum tax (AMT) .  The ability to deduct home equity loan debt interest allows individuals to effectively exceed the $1 million loan limit by an additional $100,000, thus making the interest on combined home-secured loans up to $1.1 million, deductible.

The table below illustrates how various income levels and age groups would likely be affected if the mortgage interest deduction were not allowed.  For, example, average homeowners with income over $250,000+ would generally see an increase in their tax bill of $5,408, if the mortgage interest deduction were not allowed.  Another way to look at it, is that homeowners with income over $250,000 on average will see a $5,408 reduction in their tax bill when taking the mortgage interest deduction.  The ultimate benefit to a particular taxpayer is a case by case analysis that depends on the timing of the home acquisition, the interest rate of the loan, the principal of the loan, income level, other itemized deductions, etc.

JS Realty Tax Eliminating the MID

Points paid that are associated with initial acquisition indebtedness or are associated with the substantial improvement of a principal residence may be fully deductible.  Points paid that are associated with the acquisition indebtedness of a second home must be amortized over the life of the loan.  Points paid on all refinances must be amortized over the life of the loan.  All other settlement costs are required to be capitalized and added to the basis of the property.

Every home has real estate taxes and those are deductible as well.  And unlike qualified residence interest that can be deducted on a principal residence or second home, the real estate taxes paid on all of your properties is deductible, even if you own more than two properties!

Home Sale Sell JS RealtyA final major tax advantage comes when it is time to sell your home.  If you own and live in your home for two of five years and you haven’t sold another home within the two years prior to the sale date, the gain on the sale, up to $250,000 ($500,000 for married filing jointly), is excluded from income tax.  The con side to this exclusion is that any loss on personal residence is not deductible.

There are significant tax advantages to owning a home, and several rules and restrictions in place on the tax treatment of various items.  Consult your tax advisor on the proper treatment for your situation.  Should you need a tax advisor, Thompson Greenspon is happy to assist with your tax preparation and planning needs.

JS Realty Thompson Greenspon logo4035 Ridge Top Road #700, Fairfax, VA 22030
(703)385-8888  |  www.tgccpa.com


How does my credit score affect my mortgage loan application?

Today we will look at credit reports for a potential mortgage borrower, what impacts the score, and how to improve your score.

When a lender runs a credit report on a potential borrower, there are three National Repositories that will report a credit score. They are:
1. EquifaxJS Realty Credit Equifax Experian TransUnion
2. Experian
3. Transunion

Most lenders will use the middle of the three credit scores to determine what type of loan and what interest rate a borrower qualifies for. Generically speaking, the higher the score, the lower the interest rate a consumer will be offered.

JS Realty approved creditThese three reporting entities will provide a credit score that is used to determine the risk associated with a particular borrower regarding repayment of the loan. A number of credit related variables are used to calculate the credit score. The credit score is used as a predictor as to the likelihood that the consumer will have late payments in the next 24 months. The lower the score, the greater likelihood that the borrower will be late on a payment or payments.

What are the variables that have the greatest impact on the credit score and their relative weight in the scoring?

JS Realty credit score variablePast Payment History – 35%
 -Late payments are shown for payments that are 30, 60 and 90 days late.
Current Account Balances – 30%
-Any account that has a balance of greater than 30% of the available credit limit will reduce the credit score. Balances of more than 50% will result in even lower scores.
Credit History – 15%
-How long have you had the account? Typically, the longer the better.
New credit cards will lower your score at first.
-Closing out an account will have a negative impact on your score.
Types of Credit – 10%
-The most heavily weighted type of credit is those with finance companies
Credit Inquiries – 10%
-Too many inquiries will result in lower scores

The following table will provide information on the length of time that your credit will be impacted by certain events.

JS Realty creditPayment History………….7 years(Date of last activity)
Collection accounts………7 years(Date of origination)
Judgments………………..7 years (filed)
Chapter 7………………10 years (entry)
Chapter 13……………….7 years (entry)
Inquiries………………….2 years /90 days
Tax Liens…………………7 years / (PAID)

By law, there are some factors that cannot be used in the scoring model.

Race/NationalityJS Realty Credit Ethnic
Marital status/Sexual Preference
Employment/Length of Employment/
Position or Title
nterest rate charged on a particular credit card

In summary, to receive the highest credit scores, you should have 3-5 credit lines that you pay on time and keep a balance of less than 30% of the credit limit. Spread out the use of multiple cards so that you have a low balance on all of them.

Please feel free to contact me if you are interested in learning more about how to increase your credit score or if you have any questions regarding credit and/or mortgage loans.

JS Realty Keith Harris
Keith Harris
NMLS # 838973


Keith Harris
Senior Loan Officer
Intercoastal Mortgage Company
Direct: (703) 259-0788
Cell:    (703) 395-6601


JS Realty Free Analysis Contact UsThe JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.