Blog - Michael Inkman

How Obtaining a Mortgage Can Impact Your Credit Score

February 13, 2025 by Michael Inkman

When considering homeownership, many potential buyers wonder: Will getting a mortgage help my credit score? The answer is yes—if managed correctly. A mortgage is a major financial commitment, but it can also be a powerful tool for building and maintaining strong credit. Here’s how a mortgage can affect your credit score and what you should keep in mind.

Building Credit with On-Time Payments

One of the most significant factors influencing your credit score is payment history. Mortgage payments, like other loans, are reported to credit bureaus. Making your payments on time and in full each month demonstrates financial responsibility and can have a positive impact on your credit score over time. Conversely, missed or late payments can harm your credit and make it more difficult to qualify for future loans.

The Impact of a Hard Inquiry

When you apply for a mortgage, lenders conduct a hard inquiry on your credit report to assess your financial history. This can cause a temporary dip in your credit score, usually by a few points. However, this impact is minor and short-lived compared to the long-term benefits of responsibly managing a mortgage. If you’re shopping for the best mortgage rates, multiple inquiries within a short period (typically 14-45 days) are often treated as a single inquiry, minimizing the effect on your credit score.

Credit Mix and Diversity

Lenders like to see a diverse credit profile, which includes a mix of different credit types, such as:

Revolving credit (e.g., credit cards)
Installment loans (e.g., car loans, student loans, mortgages)

A mortgage adds an installment loan to your credit mix, which can improve your score by showing that you can handle different types of credit responsibly. While credit diversity isn’t the most critical factor, it does contribute to a well-rounded credit profile.

Mortgage Reporting and Long-Term Benefits

A mortgage is a long-term credit obligation, which means it stays on your credit report for years. Having a long and positive credit history can help boost your credit score. Here’s how it works:

Positive payment history helps build credit over time.
Length of credit history increases, which is a key factor in your credit score calculation.
Low credit utilization (since a mortgage is an installment loan rather than revolving credit) can contribute positively to your overall credit health.

Potential Risks to Watch Out For

While a mortgage can benefit your credit, there are also risks to consider:

Late or missed payments can significantly lower your credit score and lead to potential foreclosure.
Taking on too much debt can strain your finances and make it harder to manage other financial obligations.
Closing other accounts while managing a mortgage may impact your credit mix and utilization rate.

Monitoring Your Credit

Since mortgages are reported to credit bureaus, it’s essential to regularly check your credit report to ensure accuracy. If you spot any errors—such as incorrect payment records or duplicate accounts—report them to the credit bureau and your lender immediately to avoid potential negative effects on your score.

A mortgage can be a valuable tool for improving your credit score if you manage it wisely. Making on-time payments, maintaining a good credit mix, and monitoring your credit report can help ensure that your mortgage works in your favor.

How Technology and Innovation Are Reshaping the Mortgage Industry

February 12, 2025 by Michael Inkman

The mortgage industry is evolving rapidly, driven by advancements in technology and innovative financing solutions. Homebuyers today have more options than ever, from digital mortgage applications to alternative financing methods that cater to different financial situations. If you’re planning to buy a home or refinance, understanding these emerging trends can help you make more informed decisions.

1. Digital Mortgages: A Faster, More Convenient Process

Gone are the days of piles of paperwork and long processing times. Digital mortgages are transforming the industry by streamlining the application, approval, and closing processes. Many lenders now offer fully online applications, allowing borrowers to upload documents, verify income, and even sign closing papers electronically.

Benefits of digital mortgages:

Speed: Faster approvals and closings mean you can secure your home sooner.
Convenience: Apply from anywhere at any time, without the need for in-person meetings.
Transparency: Online tools allow borrowers to track their application status in real time.

As artificial intelligence and machine learning improve, mortgage lenders are using these technologies to assess risk, verify documents, and provide personalized loan recommendations, making the mortgage process even more efficient.

2. Alternative Financing Options for More Borrowers

Traditional mortgages may not work for everyone, which is why alternative financing options are becoming more popular. These options help buyers who may not qualify for conventional loans due to income type, credit history, or down payment challenges.

Some emerging alternative financing methods include:

Bank Statement Loans: Ideal for self-employed individuals who may not have W-2s but can prove income through bank deposits.
Rent-to-Own Programs: Allow buyers to rent a home with the option to purchase it later, giving them time to build credit and savings.
Shared Equity Agreements: Investors help fund a down payment in exchange for a portion of the home’s future appreciation.

These options expand access to homeownership and offer flexibility for those who don’t fit the traditional mortgage mold.

3. The Impact of AI and Big Data on Mortgage Approvals

Artificial intelligence and big data are making mortgage approvals faster and more precise. Lenders now use AI-driven algorithms to analyze borrower data, assess risk, and determine loan eligibility. Instead of relying solely on credit scores, lenders can consider alternative data like rental payment history and utility bill payments.

This shift helps more people qualify for home loans and ensures fairer lending practices by considering a wider range of financial behaviors.

4. Blockchain and the Future of Mortgage Transactions

Blockchain technology is gaining attention in the mortgage world for its ability to increase security, reduce fraud, and speed up transactions. Smart contracts—self-executing contracts with terms written in code—could simplify the mortgage closing process by automating approvals and payments, making home buying even more seamless.

What This Means for Homebuyers

These trends are reshaping the way people secure home financing, making the process faster, more accessible, and more transparent. If you’re considering buying a home or refinancing, staying informed about these changes can help you navigate the mortgage market with confidence.

Working with an experienced mortgage professional ensures you take advantage of the latest tools and options to secure the best loan for your situation. Contact me today to explore your mortgage options and find the best financing solution for your needs!

Avoid These Costly Mortgage Mistakes

February 11, 2025 by Michael Inkman

Buying a home is one of the biggest financial decisions you’ll ever make. While it’s an exciting milestone, the mortgage process can be complex, and simple mistakes can cost you thousands of dollars or even derail your homeownership dreams. To ensure a smooth home-buying journey, here are some of the most common mortgage pitfalls—and how to avoid them.

1. Overextending Your Budget

It’s tempting to fall in love with a home that stretches your budget, but committing to a mortgage that’s beyond your financial comfort zone can lead to long-term stress. Lenders may approve you for a higher loan amount than you expected, but that doesn’t mean you should max out your budget.

2. Neglecting to Shop Around for a Mortgage

Not all mortgage lenders offer the same interest rates, fees, and loan terms. Many homebuyers make the mistake of accepting the first mortgage offer they receive, potentially overpaying in interest over the life of the loan.

3. Making Major Financial Changes Before Closing

Lenders carefully assess your financial situation before approving your mortgage. Any major financial moves—such as changing jobs, taking on new debt, or making large purchases—can impact your loan approval..

4. Skipping the Mortgage Pre-Approval Process

Some buyers jump into house hunting before securing mortgage pre-approval, only to find out later that they don’t qualify for the home they want. Without pre-approval, sellers may not take your offer seriously, especially in a competitive market.

5. Failing to Factor in All Homeownership Costs

Your monthly mortgage payment is just one part of homeownership expenses. Some buyers overlook costs like property taxes, homeowners insurance, HOA fees, and maintenance, which can add up quickly.

6. Ignoring Your Credit Score

Your credit score plays a crucial role in determining your mortgage rate and loan approval. Some buyers assume their credit is good enough, only to face higher rates or unexpected loan denials due to errors or unresolved issues..

Work With a Trusted Mortgage Professional

Avoiding these common mortgage mistakes can make your home-buying experience smoother and more affordable. The best way to navigate the mortgage process is to work with a knowledgeable mortgage professional who can guide you every step of the way.

If you’re ready to start your homeownership journey, contact me today. Let’s ensure you make informed decisions that set you up for long-term success!

Lee Vanvolkenburg

15:43 23 Nov 23

Michael and his team were wonderful to deal with. They were excellent with communication and always available to answer questions. Thank you all!

williams lovos

22:54 16 Nov 23

We close on the house tomorrow! Thank you David and Michael for making my first home buying a smooth process. I had several out of the ordinary situations that would had easily not been possible to get the loan in the time that they were able to approve it. My wife and I are forever grateful for the work the team did. Thank you again!

Mario Silvestri III

16:45 16 Nov 23

Rex Perkins

16:56 15 Nov 23

Everything had been going well over the past two years since refinancing an existing mortgage. The application process, approval, servicing website, everything had been very smooth, nothing but the best service. I then had a minor issue arise. We had a wind loss claim on our home and, unfortunately, I had put off getting the check cosigned until the last minute. An issue arose as part of a minor miscommunication in terms of where the check was to be forwarded for endorsement.

To make a long story short, I feared that this miscommunication and misdirected check coupled with my procrastination were going to result in the check expiring and a huge hassle on my part to go through the process again. Mr. Inkman nor his branch were in any way involved with my account or account management, yet, the check inadvertently ended up in their draft loss department and I feared this would further delay things. I was a bit frantic.

One of those that I emailed was Mr. Inkman. In an era when customer service is not as valued as in the past, I was very skeptical I would meet the deadline. But, to my surprise, Mr. Inkman took it on his own to personally get things done and get the issue resolved. It appears that he tracked down the overnighted check personally, directed it for signature, packaged and overnighted the check back to me. All the while remaining professional and pleasant and providing consistent email updates on the status. It doesn't even look like he delegated, rather taking the initiative and seeing it through on his own.

To me, that's not just doing a job, that's going above and beyond in terms of leadership, professionalism, and customer service. We could not be more happy. And, as a further sign of good will, the Fairway CEO actually emailed me personally to follow-up and assure resolution. Been very happy with Fairway since my refinance, Mr. Inkman's efforts only further reinforce that opinion.

Samer Fallouh

15:01 15 Nov 23

Debbie Salas

21:47 03 Oct 23

This transaction probably would not have happened without Michael. Whenever we hit a stumbling block, he found a way around it! He kept us informed and was a positive light all the way through to the end and beyond.
Thanks

Eric Kieffer

22:46 16 Aug 23

Did business with Michael about 20 years ago and he was happy to help us again. He and his team did a great job. See you in another 20.

How Obtaining a Mortgage Can Impact Your Credit Score

How Technology and Innovation Are Reshaping the Mortgage Industry

Avoid These Costly Mortgage Mistakes

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