Determine the length of the loan there are many new types of loans available for financing your new home purchase. You have a few options such as 15 years, 20 years or 30 years. There are even some circumstances when the loan can be set for 40 years. This is how long the lender sets for the term of the loan. A shorter length of the time will give you higher monthly payments, but less interest will be paid. Decide on the type of mortgage. A fixed-rate mortgage is the most common with a fixed interest rate over the life of the loan. In the United States you have the option of a government insured FHA loans or a VA loan available to veterans who have served in the U.S. armed services.

Your typical loan payment includes interest and principal. With time, the principal is paid down. Other factors affecting your payments might include the option to pay interest only for a certain period. This will allow you to make lower payments but doesn’t reduce the size of the loan.

A negative amortization loan allows you to pay less than interest-only. This type of loan offers the lowest possible payment for a minimum number of years. A hybrid loan is a type of loan where the terms are fixed for a certain period but payment options vary. A 30 year fixed loan that allows interest-only payments for the first 10 years is a hybrid loan. An Option ARM mortgage loan is complicated. They are adjustable rate mortgages with the options of a payment and interest variety.

Piggyback or combo mortgages are first and second mortgages combined. Borrowers take out two loans if they have less than the 20% down. Another type of special mortgage loan is the bridge/ swing loan. With this type of loan the seller uses the equity in the first home to buy another home. A Reverse Mortgage is available for anyone over the age of 62 who has enough equity in their home. The lender makes the monthly payment to the borrower as long as they reside in the home.

Many mortgage loans come with a prepayment penalty. You must make this payment if your loan is repaid too quickly. If you have a prepayment penalty in the original loan you will have to pay a penalty according to the terms of the loan. You may be allowed to cash out on the equity in your home. The value of your home rises over time allowing your use that equity for financial needs. Many mortgage loans are available for real estate investors. Using 100% financing for single-family homes gives the investor leverage. Lenders restrict the total number of properties an investor may finance.

If you take action and follow these tips, you will be able to give your credit score and immediate boost and gradually increase it even more as time passes. The major keys are to pay your bills on time and reduce your debt amounts when compared to your credit limit

Here are the 7 tips to improve your credit score!

1. Pay your bills on time. Your payment history is a major factor (35% of your FICO score) in determining your credit score. If you pay your bills late, or had an account referred to collections, your credit score will take a major hit.

2. Check for errors on your credit report. Examine your credit report for errors and contact the credit reporting agencies to fix any errors on your credit report.

3. Don’t apply for many cards at once. This will not improve your credit score because this is a characteristic of high credit risk groups.

43. Increase your credit limit. Another large factor is the amount of your debt in relation to your credit limit. If you have a card with a $10,000 credit limit and your balance is $9,000, this will not help to improve your score. To make the debt/credit limit ratio look better, you can try to call your credit card company and request an increase in your credit limit. Don’t use the extra credit though!

5. Sign up for online banking and make sure your regular recurring bills are paid automatically. This way you will not forget a payment that will wind up reducing your credit score.

6. Apply for loans within a two-week period. Every time you request a loan and the lender pulls your credit report, it can hurt your score. If you keep the loan process within a two-week period, all of the credit report lookups are bundled together as one single request!

7. Don’t ever close an open credit card account. If you pay off a credit card down to a zero balance, leave it open. Remember that a positive factor for your credit score is how much available credit you have at your disposal when compared to your credit balance, in addition to the length of your credit history.