When one anticipates going to ask for a major loan, e.g. purchase of a car or home - best to check out credit rating first. Simplifies things over having the credit granting agency find some negative stuff on your report that has no business being there. Such things leave a bad taste in their mouth, even after the issue gets straightened out - your reputation carries a bit more lasting smirch than it deserves. joyful

Hi vonrouge, Does this apply in all cases, or only when a person has been preapproved based on the previous, lower scores? Well, there could theoretically be an exception... but I've yet to see a lender voluntarily reduce an interest rate after their loan docs have been drawn. Without a broker badgering them, and without competitive pressures, lenders would happily write the deals as fat as they could get away with. And hey, Dave, I see you're not "just some mortgage guy" anymore! OOPS! That was a "Freudian Slip" of the signature-file trigger. I hit "D" instead of "S" (my code access for the "Some Mortgage Guy" sign off, and once "submitted" it was irretrievable. Hope Spike will overlook ;~) Cheers, Dave Donhoff Just some mortgage guy ;~)

Hi rivkadr, Okay, so some clarifying questions, then. I expect I will sound very stupid, but please recognize that I generally don't deal with money matters too much myself, so a lot of this is over my head. PUHLEAZE!!!! You deserve (and GET) my sincere respect for so MANY reasons!!!! A) You're willing to OPEN your MIND to serious financial topics (and not just swallow the emotional poop passed down from those who've never tried to understand!) B) You're willing to be completely OPEN WITH YOUR DETAILS (even if anonymously... you have no idea how many people are afraid of simply being real, even when nobody can know who they really are!!!) C) You are SO GENEROUS to do so out in the open on a public message board, where your learnings can be silently read and absorbed by others who WISH they had your guts!!!!!!!!! I cannot emphasize enough THE HONOR YOU DESERVE for taking this on, step by step, out in the open!!! TRUST me when I say, there are MANY folks who feel much "dumber" about their questions... and hate the fact they haven't had the courage to step out like you are. Your COURAGE trumps all... and it is the ONLY way anyone gets "smart!" OK, with your questions; 1) Itemize your current liabilities, and for each; Liabilities, I assume you mean things like student loans, mortgages, etc? i.e. stuff we owe money on. Exactly... make a laundry list for us here. If you have a recent credit report it will show much of what we are asking about... otherwise gather up your monthly bills. Example; $461,356 1st mortgage, (pull out your NOTE to check on the following,) 5 yr ARM in 3rd year, (amortized, or interest-only?) Start date was July X, 2005 Initial Fixed rate is X% Margin is 2.25 (or it is 2.75, or other?) Index is 1 month LIBOR (or 6 mo LIBOR? 1 yr LIBOR? Treasury index?) $45,356 Student Loan, consolidated from multiple loans, Interest rate is X%, minimum payment required is $YYY (or a % factor, if you know,) $12,486 Provident Visa card, 8.9% rate, 2% of principal minm payment (By the way... the 2% of principal is the standard minimum payment for revolving credit.) $8,594 Ford auto financing, 3.5% rate until 1/1/2010, then 8.9%. 8 year loan, minm req'd payment $x,xxx You get the idea... 2) Itemize your appreciating assets, and for each; What would an appreciating asset be? Are these like stocks? We don't own anything like that anymore. We have my husband's 401k -- does that count? Appreciating assets are real estate, stocks, mutual funds, bonds, cash-value life policies, pensions, annuities, securities held INSIDE your 401(k), IRA and ROTH accounts, and similar. Non-appreciating assets are your non-cash-value (term) insurance policies of all types, anticipated inheritances, business ownership, personal effects (tools, furs, jewelry, etc.) 3) What is your personal realistic exepected growth situation for your home over the next 10 years? Expected average annual rate of growth, 10 years? Total growth in dollars? I have no idea how I would estimate things like that :( I have no clue on most of your growth rate questions (except maybe our expected income -- I can hazard a guess on that). That is really *OK*!!!!!! When the answer is "I have no idea" it triggers some follow-on questions; (And its perfectly acceptable to "cheat" by asking realtor friends, checking Zillow, or Googling your local negihborhood name along with the keywords of "appreciation rates in Irvine" (or wherever.) Are you familiar with the past longterm trend of real estate in your area? If so, what was it? Do you believe that the future longterm trend will be significantly different? If so, in what way? 4) What is your estimated current NET Worth? Can you have a negative net worth? Unfortunately, yes... in fact the MAJORITY of the general public has a negative net worth. That happens when the total cash value of everything you own (and could sell,) is less than the total repayment balance of all the debts that you owe. I just reran our budget; due to my husband's job changes and a raise on my part, we're actually making an extra $3500 a month. Does that change your little form up above at all? That doesn't change the questions (especially the "divvy up your 1st and 2nd extra $1,000,) but it does give you some extra growth power, which is ALWAYS a good thing when you know how to employ it most effectively. ONCE AGAIN... I HONOR YOU FOR YOUR UP-FRONT COURAGE!!!! (I suspect you are "giving" people a great deal in this exchange!!!) Cheers, Dave Donhoff Strategic Equity & Leverage Planner

I don't have any advice to offer - hopefully that will come from others. I just wanted to report that this sort of thing is happening all over the country as near as I am able to determine. The Seattle Times did a story yesterday about a woman who makes her living training horses. When we had all that snow a couple of weeks back followed by a pounding rain, her arena collapsed and her stream of income stopped. Her creditors said they could wait to be paid, but they were small businesses and it bothered her to put that burden on them so she applied to her bank for a loan of 15k. She had a long history with this bank. She had made her mortgage payments to them on time every time. She has 500k in equity. The bank would not give her the loan. They said they just weren't sure about her. This bank, although not in trouble, was given 124 million of bailout money on the assumption that they would make loans easier to get. NOT This was our money, but the banks don't even have to tell anyone what they are doing with it.