LINTHICUM, MD, December 1, 2022 – NFM Lending is pleased to honor Lieutenant Colonel Jason Secrest, ARNG, as the NFM Salute for December 2022.

Growing up in Pennsylvania, Secrest knew from a young age that he wanted to serve his country. Both his grandfathers were WWII Veterans, and listening to their stories made him want to pursue a similar path. So, in 1999, Secrest enlisted in the Army National Guard (ARNG). Three years later, in 2002, he received his commission with the Pennsylvania National Guard while in Troop C 1-104th Cavalry.

From 2005-2006, Secrest and his team deployed to Ar-Ramadi, Iraq, to support Operation Iraqi Freedom. “It was IEDs [improvised explosive devices] and a lot of raids, street combat; it was a real wakeup call for a young kid from Central Pennsylvania,” said Secrest. “A couple of IED explosions really rocked me. It’s just a surreal moment when you’re walking and see a puff of dust kick up next to you and you realize someone just took a shot at you.” Secrest’s courage and leadership earned him two Bronze Star Medals, the Army Achievement Medal, the Army Commendation Medal, and the Combat Action Badge.

Later in 2008, his unit deployed to Egypt to join the Multinational Force and Observers, an international peacekeeping force. As a member of this group, Secrest enforced Egyptian-Israeli peace treaty mandates in the Sinai Peninsula. In 2012, Secrest went to Kandahar, Afghanistan, as a Support Operations Advisor to the Afghan Army. He taught combat tactics and logistics to Afghan soldiers and officers.

Secrest currently serves with the New York National Guard and leads its 2nd Squadron, 101st Cavalry Regiment. “I think people look at the National Guard as a weekend warrior mentality: one weekend a month, two weeks in the summer,” said Secrest. “I’m here to tell you that one weekend a month, two weeks in the summer turned into three overseas tours, deployments to combat zones, and two COVID-19 mobilizations.”

In addition to serving his county, Secrest serves his community as a full-time real estate agent in the Washington metro area. With his busy schedule, Secrest still finds time to volunteer as Senior Vice Commander of National Defense Post #46. He lives in Washington, D.C., with his wife, Stacey.

The NFM Salute is an initiative in which one military member or Veteran is honored as the “Salute of the Month.” Salutes are chosen from nominations on the NFM Salute website, www.nfmsalute.com. The “Salute of the Month” is featured on the website with a biography and information about their service. NFM Lending will donate to a nonprofit in the Salute’s name. NFM Lending is proud to present $2,500 to the Order of the Buffalo City Guard in honor of Secrest. NFM looks forward to the opportunity to continue to honor military service members and Veterans through the NFM Salute initiative.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 49 states and the District of Columbia. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, BluPrint Home Loans, Freedmont Mortgage Group, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.

When you’re considering different home loan products, one key question you should ask yourself is whether you want a fixed-rate or an adjustable-rate mortgage (ARM.) Many people become entranced by the ARM’s lower interest rates, but there’s more to them than their attractive rates. Here’s what you need to know about adjustable-rate mortgages. 

What’s an Adjustable-Rate Mortgage?

Mortgages can generally be categorized into two types: fixed-rate mortgages and adjustable-rate mortgages. As their names suggest, the interest rate for an ARM is variable and can change over the life of the loan. ARMs are appealing because of their lower starting rate and the money-saving benefits during the beginning of the loan. It’s important to be financially prepared when the rate adjusts, as no one can predict how much they will change in the future. Having an ARM can become a problem if the rate increases to a point where you can’t afford to make payments. This element of uncertainty is why ARMs typically have lower rates than fixed-rate mortgages. 

Types of ARM Loans

Hybrid

Hybrid ARMs have an initial fixed-rate period (often for 5, 7, 10, or 15 years) during which you’ll pay the same interest rate you closed on. After that period ends, your rate adjusts to whatever the current rate is for the life of the loan. The rate adjustment period can vary depending on the loan. Hybrid ARMs have an interest rate cap that limits how much the rate can increase or decrease within a certain timespan. For example, a 5/1 ARM may be structured with a 5/2/5 rate cap where after the first five years, the rate can be up to 5% higher than your initial rate in the sixth year. After that, the rate can increase up to 2% from your starting rate for the rest of the term. The last number in the rate cap indicates the maximum the rate can increase during the life of the loan, which is 5%. Make sure you understand and consider the loan’s rate cap so you know how much you could be paying. Locking in a competitive rate for the first few years gives you time to build savings, and you could save even more if the rate drops in the future. 

Interest-Only 

With interest-only ARMs, you pay a lower rate upfront and only make interest payments for a certain amount of time. Your monthly payment will be lower since you’re just paying interest. Be aware that you won’t be gaining equity since your payment isn’t going towards the principal. After the interest-only span is over, you’ll be making interest and principal payments, while being subject to an adjustable rate. Interest-only ARMs also have rate caps. Make sure you understand the repayment terms, as some loans may require a balloon payment where the entire balance is due soon after the interest-free period. 

Is it Right for You?

Though fixed-rate mortgages are perennially popular, adjustable-rate mortgages can be a good fit for some buyers. An ARM works well for people with flexible lifestyles and finances. For instance, if you have a solid level of savings, you’ll have more breathing room if rates rise significantly. This loan can also be beneficial if you expect your income to increase within the first several years of owning your home. For those who don’t expect to live in their house long (like if you have a starter home), an ARM lets you take advantage of the lower rate and build equity when it’s time to sell. If you decide later that you’d rather not deal with a varying rate, look into refinancing to a fixed-rate mortgage. 

If the higher rates of fixed-rate mortgages are keeping you from becoming a homeowner, an adjustable-rate mortgage can be a helpful alternative. Even though your rate will change every now and then, the potential savings could make having a variable rate worthwhile. 

If you have any questions about the home buying process, contact one of our licensed Mortgage Loan Originators. If you are ready to buy a home, click here to get started!

Just about everyone has debt of some sort. Debt doesn’t just affect how much money you have left at the end of the month, it also influences your credit score when you’re ready to buy a home. To learn how your outstanding balances play a role in your score, it’s important to know what revolving and fixed debt is. 

 What is Revolving Debt?

Revolving debt is when the amount you owe can vary depending on how much money you borrow. This type of debt is also special because you don’t have to pay off the full balance each month; you can pay a portion of your bill, just as long as you make the minimum payment. It goes hand in hand with revolving credit, which means you have a line of credit you can access without going through an application process each time you borrow money. The interest rates for revolving credit accounts tend to be high (in the double digits), as there’s usually nothing to serve as collateral if you default.  If you use a credit card, then you’re already familiar with revolving debt. The balance on home equity line of credit (HELOC) can also be considered revolving debt if you’re still in your draw period.

What is Fixed Debt?

Fixed debt is the opposite of revolving debt, since the amount you owe each month changes very little, if at all. Fixed debt is associated with installment credit, where you’re borrowing a set amount of money and paying it off using a repayment plan. Once you’ve been approved for the loan amount, you can’t keep borrowing money unless you apply for another loan or restructure your existing one. There’s a certain time frame where you must pay back the funds. Interest rates for installment loans are usually lower because there’s collateral to back the loan. Common examples of fixed debt include mortgages, car loans, student loans, and personal loans.

Effect on Credit Score

Revolving debt and fixed debt differ in how they’re structured, and they impact your credit score slightly differently. Most mortgage lenders use the FICO credit score model, and it is calculated using five key factors: credit utilization (35%), payment history (30%), credit history (15%), new credit inquiries (10%), and credit mix (10%). Note that credit utilization and payment history together account for over half of your score—it’s nothing to sneeze at! 

Fixed debt has a larger effect on your payment history. Even if you have a high balance on your loan, it will have a minimal effect on the credit utilization aspect of your score. Staying on top of payments will help any installment debts from bringing down your credit. On the other hand, revolving debt primarily affects both your credit usage and payment history. If you’re using a high percentage of your available credit or not making timely payments, it can cause your credit to take a hit. It’s recommended to keep your credit utilization ratio under 30% to appear less risky. Credit card accounts are notorious score damagers, so it’s important to keep them in check.  

Understanding how these types of debt can affect your credit score can allow you to be more strategic to raise your score (and reduce your debt.) Consistently having good credit habits will improve your credit health in the long run. Not having a “perfect” credit score or being debt-free shouldn’t disqualify you from becoming a homeowner. A financial advisor can guide you through debt management, and a Loan Originator can work with you to find flexible options that fit your needs. 

Disclaimer: NFM Lending is not a credit repair agency, financial advisor, or debt specialist. You should consult a financial advisor if you have any questions about your unique financial situation.

LINTHICUM, MD, November 1, 2022 – NFM Lending is pleased to honor Specialist 4 Henry Shimberg, USA, as the NFM Salute for November 2022.

Shimberg was born in Kyiv, Ukraine, where he grew up speaking Russian and Ukrainian. “Beautiful city, beautiful subway system, beautiful people,” he said fondly of Kyiv. At 12 years old, Shimberg and his family moved to the United States. Decades later, he will never forget the awe he felt when he arrived in America. “The taste of the air is something I can’t describe,” he recalled. “And the welcome that we received, again, it’s something indescribable. The grocery stores that are full of food where you didn’t have to stand in line was remarkable to a 12-year-old kid.”

When he grew older, Shimberg was unsure of what he wanted to do with his life but knew he wanted to give back to the country that had welcomed him as a child. “I walked into a U.S. Army recruiting office, and said, ‘I speak Russian, what can you guys help me with? I want to serve my country.’ And I went into the U.S. Army.”

He enlisted in 1985, and his multilingual skills made Shimberg an ideal Army Specialist. As a military linguist, he facilitated communications during a historical event: the Bering Bridge Expedition of 1989. The Expedition was a joint endeavor by six American and six Russian explorers to improve relations between the United States and the Soviet Union and to encourage the restoration of free travel between the small Indigenous towns along the Bering Strait. After two months of crossing the ice from Siberia to Alaska, the explorers were nearing the end of their journey. “When they crossed the U.S. border, there was going to be a meeting of U.S. and Russian representatives, and they needed a translator,” explained Shimberg. “The border where the U.S. and Russia meets runs between two islands: one is called Little Diomede, which belongs to the United States and has a Native village, and Big Diomede, which has a barracks of border guards.”

Shimberg and other 6th Light Infantry Division members flew in a Black Hawk helicopter from Nome, Alaska, to receive the party. “Me and this lieutenant colonel from the Alaska National Guard, we flew down to Little Diomede and we were met by our counterparts from the Russian border guards’ colonel and his team, and several news video crews,” he said. “We met on the frozen ice between these two islands. And I got to translate the meeting between these two colonels.” After four years of service, Shimberg left the Army in 1989.

Shimberg lives in McLean, Virginia, with his wife and daughter. He is immensely proud of his family and enjoys spending time with them.

The NFM Salute is an initiative in which one military member or Veteran is honored as the “Salute of the Month.” Salutes are chosen from nominations on the NFM Salute website, www.nfmsalute.com. The “Salute of the Month” is featured on the website with a biography and information about their service. NFM Lending will donate to a nonprofit in the Salute’s name. NFM Lending is proud to present $2,500 to Wounded Warrior Project in honor of Shimberg. NFM looks forward to the opportunity to continue to honor military service members and Veterans through the NFM Salute initiative.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 49 states and the District of Columbia. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, BluPrint Home Loans, Freedmont Mortgage Group, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.

Just a few months ago, it was an intense seller’s market in many parts of the country. Now the pendulum is swinging the other way, and buyers have more ground to stand on. The market is still tight, but there’s a bright light for buyers: seller concessions are back.

What are Seller Concessions?

Seller concessions are costs that sellers offer to cover to help sell the home. Buyers can use seller concessions or seller credits as a negotiation tactic to save money, and it can be especially powerful in a populated buyer’s market. In return for receiving a concession, buyers can offer sellers incentives that ease their burden, such as offering a rent-back agreement or not asking for pricey repairs. It’s more common for sellers to offer concessions if they’re trying to sell the house quickly or are trying to get an edge over other sellers in the market. Although the goal of concessions is to make the sale more appealing to buyers, they should benefit both parties.

Types of Seller Concessions

Temporary Rate Buydowns

You can negotiate with the seller to get a lower initial interest rate through a temporary rate buydown, which allows you to save money for the first few years of your mortgage. In this scenario, the seller provides funds to be deposited in your escrow account to subsidize the loan’s interest for a limited time period. Some common types are the 2-1 and 1-0 buydown. With the 2-1 buydown, the interest rate is lowered by 2% for the first year and 1% for the second year. Afterwards, you’ll pay the full rate for the life of the loan or until you refinance. The 1-0 buydown has the same setup, but the discount period is shorter.

Closing Costs

Concessions that pay for a portion of the buyer’s closing costs are one of the most common types of seller concessions. The title search fee, origination fee, home inspection, application fee, and discount points are just some of the things that make up closing costs, which the buyer normally pays for. If conditions are favorable, it may be worth asking the seller to cover some of these expenses—closing costs are typically 3-5% of your mortgage!

Repairs

After the home inspections results are released, some buyers may be unsure about closing on a house that needs significant repairs. To keep the sale moving forward, sellers may offer concessions that will subsidize improvements after the house is sold. This strategy can be a great way to reduce the buyer’s out-pf-pocket costs for any home repairs and lets them choose their own contractors. It also prevents closing from being delayed by contractors and gives buyers peace of mind that they can afford to fix up the home. Some sellers may offer home warranties as a buyer incentive, too.

Things to Consider

Limits on Concessions

If you’re thinking you can get the seller to pay all your buyer costs, think again. Sellers are limited in how much concessions they can pay, and these restrictions are meant to prevent housing market inflation. The allowable amount will depend on the type of loan you use and some individual factors:

Conventional: If you’re buying a primary or secondary home, sellers can offer up to 3% of the mortgage price in concessions if you have less than a 10% down payment. The percentage increases to 6% if you have at least a 10-20% down payment, and 9% with a down payment over 25%.

FHA: Sellers can only pay up to 6% in concessions.

VA: Concessions cannot exceed 4% for certain closing costs, including the VA funding fee.

USDA: 6% is the limit for seller contributions.

Don’t Be Greedy

Remember, seller concessions are part of the negotiation process, which means the terms should be mutually beneficial for you and the seller. If your requests are numerous, overly expensive, or ridiculous, it could jeopardize the sale and your relationship with the sellers. The sellers may reject or counter your request; they’re not obligated to accept your proposal. Don’t let the desire to save a buck blind you from what should be your ultimate goal: closing on a home.  

Ask Your Agent

Your real estate agent is your guide and liaison during the homebuying process, so it’s essential to consult with them if you’re interested in asking for concessions. Your agent will have a better understanding of the situation and can assess whether you’re in a good position to ask for seller credits. They can also help you determine whether your requests are reasonable and will create a detailed offer letter to present to the sellers.

Both buyers and sellers can use seller concessions as a bargaining tool to get something they want out of the sale. When used strategically in the right circumstances, they can make each party feel more comfortable about the deal.

If you have any questions about the home buying process, contact one of our licensed Mortgage Loan Originators. If you are ready to buy a home, click here to get started!

LINTHICUM, MD, October 17, 2022 – NFM Lending is proud to sponsor Athletes Serving Athletes’ 15th Anniversary Bash. The charity gala will take place on Friday, October 21, 2022, in Cockeysville, MD, and will feature a dinner, silent auction, live music, games, and more. ASA also plans to premiere its first feature film at the event, “The Power of We”, produced by NFM TV. The 15th Anniversary Bash will be ASA’s largest fundraiser of the year as they celebrate a milestone year of helping their community. 

Madison Grey, HR director for NFM and ASA Board Member, noted, “Everyone in the NFM family is excited to be a part of ASA’s 15th Anniversary. As a Board Member of ASA, I know all that goes into getting ready for the 90+ mainstream running events that ASA athletes and volunteers participate in each year. It’s a real accomplishment and NFM is here to support the next 15 years of ASA’s journey to bring this experience to as many athletes as possible.”

ASA was founded in 2007 to “elevate the quality of life for individuals with limited mobility by empowering them to train for and participate in mainstream running events.” By creating an accessible space for athletes and their supporters, ASA fosters belonging and dignity within the physically challenged community. In addition, their expansive network of Wingmen volunteers provides moral support and the extra push athletes need to cross the finish line. ASA holds races throughout the year in Maryland, Delaware, and Pennsylvania.

NFM Lending is proud to partner with ASA and promote its vision of inclusivity and connectedness.

NFM Lending is committed to supporting charities and nonprofits that better the communities they serve. NFM is also involved in charitable efforts with St. Jude’s Children’s Research HospitalGary Sinise Foundation, and Greater Baltimore Urban League to name a few.

About NFM Lending
NFM Lending is a national mortgage lending company currently licensed in 49 states and the District of Columbia. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, Bluprint Home Loans, Freedmont Mortgage Group, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.

Everyone knows that computers can be hacked, but homes? It’s true—house hacking is a thing, but it has nothing to do with the internet or databases. More and more people are turning to house hacking to afford homeownership, but is it right for you? 

What is House Hacking?

House hacking is an investment strategy where you buy a property to serve as your primary residence, with the intention of renting out part of it to subsidize your mortgage. You can even become a house hacker if you already own your home. The concept of house hacking isn’t exactly new, but it has recently become more popular among aspiring homeowners due to increasing housing costs.

Traditionally, house hacking involves buying a multifamily home (like a duplex) and renting out the other unit, but that’s not the only way you can get into house hacking. You can put individual rooms, entire floors, or accessory dwelling units (ADU) up for rent—there can be a lot of flexibility! Additionally, you can decide whether you want to host short or long-term renters.

The “hack” in house hacking stems from the idea that you can buy a home and make passive income from it without going through the more complex steps of purchasing a home outright as an investment property. When you buy an investment property that you don’t plan on living in, you’ll have fewer mortgage options available and usually, a larger down payment. With house hacking, your investment property is your primary residence, so you can take advantage of a conventional, FHA, or VA loan to finance your house. This method can make buying a home more affordable, especially for new homeowners.

Financial Benefits

Perhaps the most enticing part of house hacking is being able to significantly lower or even eliminate your monthly mortgage payment. The passive income generated from renting out your home will reduce your financial burden, saving you money over time. As a homeowner, you can reap all the benefits of homeownership, including property appreciation, certain tax deductions, and building home equity. In fact, building home equity with this investment strategy may be quicker than if you were the sole party making payments.

Things to Consider

Landlord Responsibilities

Homeownership means you no longer have a landlord, but house hacking means you’ll become one yourself. This type of responsibility is not for everyone. As the owner, you’ll be responsible for fixing and maintaining the property, or at least paying for repairs. The tenants you choose can make or break a house hacking venture (and your sanity), so it’s essential to vet and find candidates who are responsible and reputable. Still, you may have to have uncomfortable rent conversations with your tenants. You can hire a property manager to help with daily operations, though it will affect your total gains.

Local Limitations

Before you create a rental listing, make sure you’re allowed to rent out your house. If your neighborhood has an HOA, they may have guidelines about how you can use the property. If you’re thinking of renting out an ADU, such as a furnished basement, you need to check with your local zoning authorities, as ADUs must meet certain requirements for safety and livability.

Privacy

Just like having roommates in a rental, house hacking limits your privacy. Consider whether your lifestyle is compatible with sharing spaces with other people. Would having tenants cramp your style if you also live with a partner or have children? Of course, the amount of privacy also depends on how your home is set up; ADUs and multifamily properties will give you more privacy.

Cost Analysis

House hacking can be lucrative, but it isn’t a get-rich-quick scheme. Make sure to consider the financial impact of any investment. Location is always a key factor when buying a home, and if you’re hacking your house, it will affect rental demand and how much you can reasonably charge for rent. You can use rental listing sites to gauge how much to charge for rent in your area. If you’ve found a promising property, compare your estimated mortgage payments with the total estimated rent payments. Don’t forget to factor in cost of repairs! Understand that there may be periods of vacancy, so be sure you can still cover your mortgage if you’re not bringing in full rental income.

Be sure to get pre-approved and work with a lender and real estate agent who understand the concept of house hacking. Their knowledge will be invaluable when you’re considering properties and loan types. House hacking may not be for everyone, but it can be an accessible way to make homeownership possible.

If you have questions about home equity, contact one of our licensed Mortgage Loan Originators. If you’re ready to begin the home buying process, click here to get started!

LINTHICUM, MD, October 4, 2022 – NFM Lending is pleased to honor Petty Officer Richard Pard, USN, as the NFM Salute for October 2022.

Pard grew up in a large family with seven brothers and two sisters. His father served in WWI, and seven children, including Pard, would eventually follow in his military footsteps. In 1954 at 17 years old, he enlisted in the U.S. Navy. “It was the end of the Second World War, and a lot of senior people were leaving the Navy. They were short of people aboard ships, and my brother was serving aboard the USS Bremerton. So I just joined him aboard ship,” he said.

After receiving basic training and specialized training for his role as an Electronics Technician, Pard was stationed on the USS Bremerton. He said of life in the Navy, “We were basically working 24/7 all the time we were at sea. We stood in line at the mess decks to get fed two or three times a day depending on what was going on.” Despite the routine nature of living and working on a ship, Pard visited various countries where he had many unique experiences. “We basically sailed all over the Pacific. On the second cruise we did, we went to the Olympics in Australia,” he recalled. “We did ports like Hawaii and Hong Kong. Our home port in Japan was Yokosuka, and we did Singapore and all over the South Pacific. We sailed a lot between China and Taiwan.” In 1957, Pard left the military after three years of service.

In September 2022, Pard and 23 other Veterans traveled to Washington, D.C., through Honor Flight Network. Honor Flight Network takes Veterans on an all-expenses-paid trip to the nation’s capital so they can visit military memorials and museums. “The first one we visited was the Navy Museum, and that’s the service that I served in. It was exciting. You know, we saw the [memorials] for the Army and Air Force, Korea, and Vietnam.”

Pard lives in San Tan Valley, Arizona. He enjoys playing golf and spending time with his friends from his Veteran’s club.

The NFM Salute is an initiative in which one military member or Veteran is honored as the “Salute of the Month.” Salutes are chosen from nominations on the NFM Salute website, www.nfmsalute.com. The “Salute of the Month” is featured on the website with a biography and information about their service. NFM Lending will donate to a nonprofit in the Salute’s name. NFM Lending is proud to present $2,500 to the Veteran’s Club at Encanterra in honor of Pard. NFM looks forward to the opportunity to continue to honor military service members and Veterans through the NFM Salute initiative.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 49 states and the District of Columbia. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, BluPrint Home Loans, Freedmont Mortgage Group, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.


You probably already know that credit score plays an important role when buying a home, but understanding how credit affects your ability to buy a home goes beyond a simple number. Let’s breakdown some of the most common credit questions from aspiring homeowners.

Will it help my credit score to close a credit card I’m not using?

You might think closing a seldom-used credit card will improve your credit score, but this is the last thing you should do. When you close your credit card, you’re reducing your available credit, which will drive down your score. Instead, use your card for small purchases every now and then and pay it off in full. Consider designating it for minor recurring payments, such as a subscription service. Doing this will prevent the bank from closing your account for inactivity and can benefit your score since you won’t carry a balance.

What’s the difference between a FICO score and the score I get from free credit score sites?

You’ve probably seen ads for sites that let you check your credit score for free, but they don’t always paint a full picture of your credit health. If you’ve relied on the information from one of these sites, it may come as a surprise if your lender reveals a credit score that’s very different. FICO is the primary model mortgage lenders use to review your credit, but some credit sites use a totally separate model called VantageScore. Since FICO scores and VantageScores are calculated differently, there can be a sizable disparity between the numbers. For home buying purposes, it’s better to refer to your FICO score. To get your free FICO credit score, visit the Experian site.

Will it hurt my credit score to apply with other lenders?

When you find a lender to get pre-approved, they’ll perform a hard credit inquiry to get a detailed look at your credit situation. A hard credit pull will slightly decrease your score because your credit report is being accessed for application approval, but soft credit pulls (like checking your credit score) won’t affect it. The drop is usually 5-10 points, and your score will rebound in a few months if there are no negative changes to your credit. If you still aren’t sure which lender to choose, you’ll have a 3 to 4-week window where any hard mortgage credit pulls will be counted as a single inquiry and won’t further reduce your score. If your credit goes through another hard inquiry after that timeframe, it will affect your score. 

What’s the quickest way to increase my credit score?

Increasing your credit score is like working out—you won’t see the results you want overnight. The best way to improve your credit score is to establish and maintain good credit habits.

Paying bills on time may not sound like a huge deal, but payment history accounts for a whopping 35% of your FICO score! Consistently making timely payments will increase your credit score and make you seem more reliable as a borrower. Keep in mind that making the minimum payment will prevent your score from falling if you’re tight on funds, while paying it in full will have a larger impact on your credit.

Just because you’re able to pay with credit doesn’t mean it’s a good idea to use all of it at once. The percentage of how much credit you’re using in relation to available credit is called your credit utilization ratio, and it accounts for 30% of your FICO score. When you’re close to your credit limit, it hurts your score and makes you appear financially risky. Aim to keep your utilization ratio low and use around 30% of your available credit. You can determine your ratio by dividing the total credit limit of your credit cards by your total balance and multiply that number by 100.

Paying down debt is another way to improve your score. It will also reduce your debt-to-income ratio (DTI), which will increase how much you can afford for a home.  Pay special attention to debt with high interest, as it will accumulate rapidly.

I’m not planning on buying a home right now, but how can I financially prepare when I’m ready?

Even if homeownership isn’t in your immediate future, it’s never too early to put yourself in a solid financial position for when the time is right! Improving your credit worthiness will play a significant factor in being able to buy a home, but there are other areas that are important, too.

The period where you’re gearing up to buy is an ideal time to start a home savings fund. If you can put a portion of your paycheck into savings each month, the amount will grow over time. You might also want to create a budget to manage your expenses and see where you can cut back. While the “requirement” of needing 20% down to buy a home is a misconception, it’s wise to have a solid level of savings when you apply for a mortgage. In addition to reducing existing debt, avoid taking out new, unnecessary debt. This doesn’t necessarily mean you need to be debt-free to buy a home, but having fewer debts means a lower DTI ratio and more purchasing power.

There are numerous myths about credit out in the wild, and it’s easy to believe them if you’re unfamiliar with how credit scores work. When you have a basic understanding of best credit practices, you can be better prepared when you apply for a mortgage.

If you have any questions or want more information about loan programs, contact one of our Licensed Mortgage Loan Originators. If you are ready to begin the homebuying process, click here to get started!

NFM Lending is not a credit repair agency, financial advisor, or debt settlement company.

LINTHICUM, MD, September 21, 2022 — NFM Lending is pleased to announce the opening of a new branch located at NFM’s Corporate office at 1190 Winterson Road in Linthicum, MD that will be led by Branch Manager Tom Bowen. Bowen will be joining NFM’s Influencer Division, where he and his team will create engaging social media content to educate followers on home buying topics such as getting pre-approved, types of loan products, and creditworthiness. The NFM Lending branch will focus on expanding NFM’s flexible and powerful lending platform to better serve community families with exceptional customer service. NFM Lending offers Conventional, FHA, VA, USDA, FNMA, Jumbo, and many other loan options to fit every borrower’s need.

“Having worked with NFM early in my career, I watched over the years as they grew to become one of the premier local lenders in the DMV area, having helped thousands of homeowners in the process,” said Bowen. “I am excited to rejoin the NFM Family and continue to support my referral partners and provide exceptional service and commitment to my clients.”

The branch’s goal is to continue to provide the same commitment and dedication to borrowers, ranging from first-time homebuyers to seasoned buyers looking for their next home, a second home, or investment property.

“Tom and I started working together nearly 15 years ago,” said Greg Sher, Chief Business Development Officer at NFM. “He is the consummate mortgage professional. To be reconnected with him is a dream come true.”

Bowen is currently seeking qualified Mortgage Loan Originators for full and part-time positions. For more information, please contact:

Tom Bowen
Branch Manager
NMLS#109839
215-964-7340
tbowen@nfmlending.com
www.nfmlending.com/tbowen

About NFM Lending

NFM Lending is a national mortgage lending company currently licensed in 49 states in the U.S. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, Bluprint Home Loans, Freedmont Mortgage Group, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.­­