According to an article at Fox News, foreclosures went up by 24% in August. A lot of these foreclosures are being blamed on ARMs or adjustable rate mortgages.

If you have had trouble meeting your mortgage payment or if you are facing foreclosure, read the article for helpful tips. Remember, the bank doesn’t want your house, they would much rather work with you than foreclose.

Also included in the article is information on The Homeowners Preservation Society, a non-profit organization established to help homeowners in trouble. They have a hotline number 1-888-995-HOPE (1-888-995-4673) that is available 24 hours a day, 7 days a week. If you are in trouble, contact them early while you still have options.

Free Advice for Homeowners Facing Foreclosure

New home sales are way down and the number of existing homes on the marketplace is increasing. There’s more than one or two “For Sale” signs in most neighborhoods.

It’s a buyer’s market. Sure, the mortgage rates have gone up a point or so from their lower rates of last year but this fact has caused sellers to realize that with less attractive mortgage rates, the price on the house has to be attractive. House prices are falling with every month they go unsold.

And let’s face it, you can always refinance another day, when the rates are lower – but there’s nothing you can do about paying too much for your house.

There are a lot of voices telling you to wait, prices will come down more. While this may be true for a while, it won’t be true forever. Still, take your time in deciding on a purchase. There are lots of homes to choose from. Pick your lender carefully and make the best deal you can.

In a slower market with prices coming down and rates going up, you probably won’t be able to purchase your home and then turn around and sell next year at a profit, but wait 5 years and you will probably do fine.

When a creditor looks at your credit report there are certain factors that will influence their decision about extending credit to you.

Payment History: Do you pay your bills on time? One late payment in two years is not going to make a huge difference but a pattern of late payments will negatively affect your credit rating. Payments that are consistently 30 days overdue will lower your credit score more than any other factor.

Credit Applications: Your credit report will show who else has requested to view your report. If you have applied for credit too many times, the multiple inquiries can lower your score. Keep credit card applications to a minimum, apply only for those accounts you really want and be careful about how many accounts you have open. It is better to have long-standing accounts that are paid on time than to have multiple accounts with shorter histories.

Balances: On average, it is best to never utilize more than 30% of your available credit. Having “maxed-out” accounts will negatively affect your score.

You may be surprised to learn that income is not a major factor in determining your credit score. If you have a large income but a history of late payments, your score will be lower than if you had a moderate income and a consistent payment history.

The three national credit reporting agencies use a formula known as FICO, named for Fair Isaac Corp., to calculate your credit score. The lowest score is 300, the highest 850. A score of 720 or higher will get you the best rates. A low score can mean higher interest rates or denial of credit.

Anatomy of a Credit Score

35% – Payment History

30% – Outstanding Debt

15% – Length of Credit History

10% – Number of Inquiries on your report

10% – Types of Credit you have

Because the information used to calculate your credit score is gleaned from your credit report, you should obtain a copy of your credit report from each of the three national CRAs and review them for mistakes and incorrect information. If you find errors, report them to the credit reporting agency.

AnnualCreditReport.com