Can a credit card affect your mortgage approval?

There is no doubt that mortgage market is very unstable right now & lenders are very strict on whom they approve for a mortgage. If you are looking for a mortgage, your credit score and debt to income ratio need to be good.

I have seen many people spoil there credit score by unplanned use of credit cards, taking too many credit cards and not keeping payments current on them. For lenders your payment capacity as well as payment history is important and such irresponsible use of credit card debt can ruin your chances of getting approved for a mortgage.

Before applying for a credit card there are many things to look into and decide which would be the best option to select. Various websites offer information and guidance on which type of card to select and also the best credit offers presently available in the market.

One such site is www.low-interest-rate-visa-credit-cards.com which has a discussion board named, Immediate credit card care service, where people can post there queries and get answers. There are answers in their databank to plenty of common question that one should be aware of before applying for credit plus the option of posting there own questions if the existing replies do not answer there specific questions.

I spent some time in that section and the answers given there are quite descriptive, not like one liners found in many card help forums. People wishing to get some knowledge about credit cards & the offers presently available should visit this site.

Losses for Wachovia

Wachovia has lost $.20/share or $350 million in the 1st quarter & in comparison it had earned $1.20/share in 1st quarter of 2007. The loss was mainly due to $2.1 billion in setting provisions against credit losses & asset write-downs to the tune of $2 billion.

Wachovia's problems started after it purchased a CA mortgage lender & bank - Golden West for $25.5 billion 2 years back. This acquisition exposed the company to aggressive lending practices & included more emphasis placed on Option ARMs & Interest Only mortgage loans. The bank apart from being hit by increased delinquencies in its mortgage loans mainly in CA, is also facing losses in its credit card, auto & home equity businesses.

Repayment schedule for a 6 year amortized mortgage

The following figure shows repayment schedule for a 6 yr. $1000 amortized mortgage loan having 9% interest for those who are interested in knowing the amortization schedule for such type of mortgages.

Sub prime mortgage loans yet to reset

According to statistics about $800 billion of sub prime mortgage loans are yet to reset -

Mortgage affordability

The following graph shows mortgage affordability as per borrower's income -

Housing Rescue Bill

This bill will help houseowners facing foreclosure. Some of the features of the bill are:

1. 
   New standard property tax deduction of $500 for individuals and double that for couples who do not itemize deductions.


2. 
   There will be a $7000 1-year tax credit for purchasing foreclosed homes.


3. 
   For use as low-income rentals or for buying foreclosed property for reselling, local government to get grants amounting to $4 billion.


4. 
   For refinancing sub-prime loans, local housing agencies would be able to avail $10 billion in tax exempt bonds & $100 million for expanding counseling for people who are at risk of default.


5. 
   FHA loans will have down payment requirement up at 3.5% from present 3%.

Fed Discount window for investment banks

Investment banks have borrowed $10.341 billion from Fed's primary dealer credit facility known as discount window. Dealers also borrowed $92.658 billion under TSLF, Term Securities Lending Facility.

U.S. Treasury Securities are lent which have a 28 day term by Term Securities Lending Facility to primary dealers using a auction process.