Financial ABCs

What do the New Mortgage Rules Mean to You?

Buying a home should be an exciting time especially for first-time homebuyers. But, from finding the home of your dreams and securing financing, to actually signing on the “dotted line,” the process can be overwhelming.

Recently, the Consumer Financial Protection Bureau (CFPB) implemented two new mortgage disclosure forms and other rules to help make this process easier. Let’s take a look at what you can expect with these new rules and disclosures:

  • New Loan Estimate Form. Once you’ve applied for a mortgage loan, lenders must provide you with a Loan Estimate form within three days. On this form, you will be given specific details about the loan you’ve requested, such as the loan amount, rate, term and closing costs. Also, the form is now better designed to help you understand the loan information than previous forms.
  • Compare Loans. Using the Loan Estimate, you’ll have the opportunity to shop around for a more advantageous loan offer. Because these forms are standard forms, you’ll be able to compare the terms and conditions of your “estimated loan” with others easily.
  • New Closing Disclosure Form. Once you’re ready to close on your loan, you’ll be given a new Closing Disclosure form, which will outline everything about your loan. The information on this form should match the information on the Loan Estimate.
  • Time to Compare and Understand Information. In the past, you were only given 24 hours to review the documents prior to closing. Now, the new rules mandate that a lender give you three days between getting your Closing Disclosure form and actually committing to the loan. During this time, you have the opportunity to review the information provided, compare it to the Loan Estimate, and ask any questions you may have.

To learn more about the new mortgage rules, or to view the new forms, visit Additionally, if you have specific questions about the mortgage loans available at CharterBank, click here or call us at 800-763-4444.



What Makes Up Your Credit Score?

Did you know that your credit score will have a direct impact on most major purchases you make? It will definitely have an effect on the rate you’ll get with your auto loan, or how much you can borrow for a new home.

Most financial institutions in the United States use FICO credit scores as a basis for providing loans to consumers. A FICO credit score is made up of a variety of personal financial statistics and can range from 300 (lowest) to 850 (highest). This number is directly related to loan qualification and interest rate, meaning the higher the score, the lower your rates and the more credit you may be able to qualify for in the future. Here’s how this score is broken down:

  • 35% of the Score = Payment History: How have you repaid your debt in the past? Generally, anything negative will drive down your score and anything positive will drive up your score. Your past lending behavior is used to determine your future lending behavior.
  • 30% of the Score = Credit Utilization: This part of the score focuses on how much available credit you have. Do you max out your credit cards? Are you always close to your credit limits? The best credit scores typically have anywhere from seven to 20 percent of their overall debt used.
  • 15% of the Score = Length of History: It is impossible for a person who is new to credit to have a perfect score. Unfortunately, it doesn’t work that way. You have to prove over time that you can manage credit responsibly.
  • 10% of the Score = New Credit: How many credit inquiries or new lines of credit (including credit cards) do you have? More is not better in this instance. Be sure to limit any new credit you request to only that which you truly need. Having a credit card “just in case” will not usually help your score. You need to use the credit you have, but use it wisely.
  • 10% of the Score = Credit Mix: What type of loans do you have? A credit card? An auto loan? A home loan? In most instances, lenders find that borrowers with a good mix of credit may be less of a risk for them.

What is your FICO score? By law, you have the right to get a free copy of your credit report every year. To obtain your free report, visit If you have any questions about your credit score, or you believe something may not be quite right on your credit report, give us a call at




Start Your Credit History with a Secure Credit Card

Establishing credit can be a tricky issue especially because you need credit in order to get credit. But, what are you supposed to do if you are just out of college and don’t have a credit profile or, you’re trying to re-establish credit after losing everything (including your credit score) after a terrible divorce?

One way to establish credit quickly and effectively is to apply for a secure credit card. A secure credit card operates just like a normal credit card, but requires a security deposit. In most instances, this security deposit is in the form of funds in a savings account that are used to support your credit card.

A secured credit card credit limit is associated with your ability to repay the balance just like a typical credit card. This amount is determined based upon your income and a demonstrated ability to repay.

Below is an example as to how this might work:

Let’s assume you provide sufficient basis to support a credit card limit of $500. In order to obtain the secured credit card, you will be responsible for depositing $500 into a savings account at your financial institution to act as “collateral” for your credit card. This initial $500 deposit will not be used to offset charges on the card but will be held in the deposit account as a security deposit in case the card user defaults on payments. In other words, if you don’t make your payments, your money will be at risk.

As you make payments on this card, they will be reported on your credit history. As time progresses, you can eventually move onto a regular credit card and begin on the road to a strong credit position.


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