The Mortgage Insider - Home Financing with Contemporary Mortgage

How to Maintain a Stellar Credit Score

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Navigating finances can be intricate, but when it comes to elevating and preserving your credit score, simplicity reigns supreme. Here are four essential strategies to uphold a strong credit profile:

    1.    Timely Bill Payments: Consistently paying bills punctually contributes positively to your credit score, enhancing it over time.

    2.    Borrow Wisely: Exercise prudence in borrowing only what you can comfortably repay. Strive to keep your credit utilization below 30% of your available credit. Consider establishing an emergency fund to mitigate the need to max out credit cards during financial strains.

    3.    Strategic Credit Applications: When seeking loans or credit cards, opt for quality over quantity. Applying for numerous store credit cards solely for discounts may raise red flags with lenders.

    4.    Regular Credit Monitoring: Stay vigilant by routinely checking your credit history across all three major bureaus—Equifax, Experian, and TransUnion. Utilize for free credit reports every three months or annually to detect and rectify any inaccuracies promptly.

By adhering to these principles, you can safeguard and bolster your credit standing for a more secure financial future.

Contact us today to learn more!


Posted by Austin Howland on March 28th, 2024 8:29 PM

Understanding Different Mortgage Types: A Guide for Homebuyers

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Buying a home is an exciting journey, but the process can be overwhelming, especially when it comes to choosing the right mortgage. With various mortgage types available, it’s crucial for homebuyers to understand their options. In this guide, we’ll break down the most common mortgage types to help you make an informed decision on the path to homeownership.

1. Fixed-Rate Mortgages


A fixed-rate mortgage offers stability with a constant interest rate throughout the loan term. This means your monthly payments remain consistent, providing predictability for budgeting.

Best For:

Homebuyers seeking long-term stability and planning to stay in their homes for an extended period.

2. Adjustable Rate Mortgages (ARMs)


ARMs have variable interest rates that fluctuate based on market conditions. Initial rates are typically lower than fixed-rate mortgages but can increase over time.

Best For:

Buyers comfortable with potential rate changes, especially if they plan to sell or refinance before any adjustments occur.

3. Conventional Loans


Conventional loans are not government-backed and typically require higher credit scores and down payments. They offer flexibility in terms and are suitable for buyers with strong financial profiles. 

Best For:

Homebuyers with good credit and a sizable down payment looking for a traditional mortgage option.

4. FHA Loans


Backed by the Federal Housing Administration, FHA loans are designed to assist first-time homebuyers with lower down payment requirements and more flexible credit qualifications.

Best For:

Buyers with limited funds for a down payment or those who may not qualify for conventional loans.

5. VA Loans


Available to eligible veterans and active-duty military members, VA loans offer favorable terms, including zero down payment and competitive interest rates.

Best For:

Military personnel and veterans looking for cost-effective financing options.

6. USDA Loans


USDA loans cater to homebuyers in rural areas, providing low to moderate-income families with affordable financing options.

Best For:

Buyers in designated rural zones seeking a low-cost mortgage solution.

7. Jumbo Mortgages


Jumbo mortgages are for high-value properties that exceed conventional loan limits. They come with unique considerations due to the larger loan amounts.

Best For:

Homebuyers investing in luxury properties with higher price tags.


Choosing the right mortgage type is a pivotal decision in your homebuying journey. Consider your financial situation, future plans, and preferences to determine which mortgage aligns best with your needs. Consulting with a knowledgeable mortgage broker can further guide you through the process and help you secure the ideal financing for your dream home.

Remember, each homebuyer is unique, and there is no one-size-fits-all mortgage. By understanding the differences in mortgage types, you empower yourself to make an informed choice that sets you on the path to homeownership success. As a mortgage broker, we handle the leg work of sorting through and presenting each borrower with the best mortgage options tailored to their specific needs.

Contact us today to learn more about which home mortgage options are best suited for you!


Posted by Austin Howland on January 23rd, 2024 7:20 PM

The Crucial Role of Credit Scores in the Mortgage Process

Picture of credit score and credit application

When it comes to securing a mortgage, your credit score is often the unsung hero of the process. Many potential homebuyers underestimate just how important this three-digit number can be. In this article, we'll delve into the significance of credit scores in the mortgage process and why maintaining a healthy credit profile is vital to your homeownership dreams.

The Credit Score: Your Financial Report Card

Your credit score is a numerical representation of your creditworthiness, a report card that lenders use to assess the risk of lending to you. It reflects your credit history, including your payment history, the amount of debt you owe, the length of your credit history, new credit inquiries, and the types of credit you use.

Why Is Your Credit Score Important for Mortgages?

1. Interest Rates:

One of the most significant impacts of your credit score on your mortgage is the interest rate you'll be offered. Lenders typically offer lower interest rates to borrowers with higher credit scores. This means that with an excellent credit score, you can potentially save thousands of dollars over the life of your mortgage.

2. Loan Approval:

Lenders use your credit score to assess your creditworthiness. A low credit score can make it challenging to secure a mortgage. In contrast, a higher credit score improves your chances of an easier loan approval.

3. Down Payment Requirements:

A strong credit score can reduce the required down payment for some loan programs. In contrast, borrowers with lower credit scores may be required to make a larger down payment to mitigate risk for the lender.

4. Mortgage Insurance:

A lower credit score often results in the need for mortgage insurance. Mortgage insurance can add to your monthly mortgage costs, so maintaining a good credit score can help you avoid this expense.

Improving Your Credit Score for a Better Mortgage Deal

If your credit score isn't where you want it to be, there are steps you can take to improve it:

1. Check Your Credit Report: Review your credit report for errors and discrepancies. Dispute and rectify any inaccuracies you find. For more info on how to retrieve a copy of your free credit report, click here: How to Get Your Free Credit Report

2. Pay Bills on Time: Consistently paying your bills on time is the most significant factor in your credit score. Set up reminders or automatic payments to ensure you're never late.

3. Reduce Debt: Lowering your credit card balances can significantly improve your credit score. Aim to keep your credit utilization (the amount of credit you use relative to your total credit limit) below 30%.

4. Avoid Opening New Credit Accounts: Each new credit inquiry can temporarily lower your score. Avoid opening new credit accounts before applying for a mortgage. 

5. Don't Close Old Accounts: The length of your credit history matters. Keep older, well-managed accounts open to demonstrate a longer credit history.

6. Seek Professional Guidance: If you're struggling to improve your credit score, consider working with a credit counseling agency or a financial advisor. Feel free to contact us if you would like a referral for one of these companies.


Your credit score is a critical factor in the mortgage process. It affects not only your eligibility for a loan but also the terms and conditions you'll be offered. Understanding the significance of your credit score and taking steps to maintain or improve it is a vital aspect of achieving your homeownership dreams. Start early, manage your credit responsibly, and consider seeking guidance if necessary to ensure your credit score works in your favor when it's time to secure a mortgage. Remember, the higher your score, the better your mortgage deal is likely to be.

If you have questions about your credit score, the mortgage application process, or any aspect of securing a mortgage, our team of experienced mortgage professionals is here to help. Feel free to contact us for more information and personalized guidance on your journey to homeownership. We're dedicated to assisting you in every step of the process.

For more information on credit scores, check out some of our other pages on the subject: 


Posted by Austin Howland on October 18th, 2023 8:34 PM

The Role of Mortgage Brokers: How They Help You Find the Best Deal

Buying a home is an exciting journey, but navigating the complex world of mortgages can be overwhelming. This is where mortgage brokers come into play, acting as your trusted guide through the intricate process of securing a mortgage. In this article, we'll delve into the pivotal role of mortgage brokers and how they assist you in finding the best deal for your home financing needs.

Understanding the Mortgage Broker's Role

Mortgage brokers are professionals who act as intermediaries between borrowers and lenders. Their primary goal is to connect homebuyers with suitable mortgage options based on their financial circumstances and requirements. Mortgage brokers work independently and have access to a wide network of lenders, including banks, credit unions, and non-traditional lending sources. 

Advantages of Working with a Mortgage Broker

1. Access to a Diverse Range of Lenders:

Mortgage brokers have the advantage of having relationships with various lenders. This means they can shop around on your behalf, presenting you with multiple loan offers that best match your financial profile. They also have ability to find which lender is currently offering the lowest available rate.

2. Customized Mortgage Solutions:

Every homebuyer's financial situation is unique. A mortgage broker takes the time to understand your specific needs and financial goals, allowing them to tailor mortgage options that align with your circumstances.

3. Saves Time and Effort:

Rather than contacting multiple lenders individually, a mortgage broker streamlines the process by presenting you with a curated selection of options. This saves you time and the hassle of researching and comparing numerous lenders.

4. Expert Advice and Guidance:

Mortgage brokers are well-versed in the intricacies of the mortgage industry. They can explain complex mortgage terms and concepts in simple language, empowering you to make informed decisions.

5. Negotiation Power:

Experienced mortgage brokers can negotiate with lenders on your behalf to secure competitive interest rates and favorable terms. Their negotiation skills can potentially save you money over the life of your loan.

6. Assistance with Paperwork:

Mortgage applications involve a substantial amount of paperwork. A mortgage broker assists in gathering and organizing the necessary documentation, ensuring a smoother application process. 

7. Credit Score Guidance:

If your credit score is less than ideal, a mortgage broker can guide you on steps to improve it before applying for a mortgage. This can help you qualify for better interest rates.

The Mortgage Brokerage Process

1. Initial Consultation: The mortgage broker conducts an in-depth consultation to understand your financial situation, homeownership goals, and preferences.

2. Loan Shopping: Leveraging their network, the broker searches for mortgage options that align with your requirements, presenting you with potential lenders and loan programs.

3. Comparison and Analysis: The broker presents you with various loan offers, detailing the pros and cons of each option to help you make an informed decision.

4. Application Submission: Once you've chosen a lender, the broker assists in preparing and submitting your mortgage application along with the necessary documentation.

5. Negotiation and Approval: The broker negotiates with the lender to secure the best possible terms and rates. They also provide support throughout the underwriting and approval process.

6. Closing the Deal: The mortgage broker ensures a smooth transition to closing, coordinating with all parties involved to facilitate the final steps of the mortgage process.


Navigating the complex landscape of mortgages requires expertise, access to resources, and a deep understanding of the lending industry. A skilled mortgage broker offers all of these and more. By working with a mortgage broker like Contemporary Mortgage Services, Inc., you gain a knowledgeable partner who is dedicated to finding the best mortgage deal for your unique circumstances, making your journey to homeownership a more seamless and rewarding experience. If you're ready to secure the best mortgage terms tailored to your needs, partnering with a mortgage broker is a smart choice.

Contact us today and let us help you on your journey to homeownership!!


Posted by Austin Howland on August 17th, 2023 10:56 PM

Navigating the Path to Homeownership: Steps to Getting a Mortgage Loan

Embarking on the journey to homeownership is an exciting and significant milestone. Whether you're a first-time buyer or a seasoned homeowner, obtaining a mortgage loan is a crucial step in making your dream home a reality. To help guide you through the process, we've outlined the essential steps to getting a mortgage loan. From understanding your financial situation to securing the best terms, this comprehensive guide will empower you with the knowledge you need to navigate the intricate world of mortgage financing.

1. Assess Your Financial Health

Before diving into the mortgage application process, it's crucial to take a close look at your financial situation. Calculate your monthly income, including salaries, bonuses, and any other sources of revenue. On the other side of the equation, list your monthly expenses and debts. This will give you a clear understanding of your debt-to-income ratio (DTI), a key factor lenders consider when determining your loan eligibility (See prior blog post on Understanding Debt to Income Ratios for more)

2. Determine Your Budget

With a clear picture of your financial health, establish a realistic budget for your new home. Online mortgage calculators can provide a rough estimate of how much you can afford based on your income, debts, and down payment. Keep in mind that your monthly mortgage payment should comfortably fit within your budget, leaving room for other essential expenses.

3. Explore Mortgage Options with Mortgage Broker

There are various types of mortgage loans available, each with its own set of terms and conditions. Common options include fixed-rate mortgages, Conventional loans, FHA loans, and VA loans. There are also always new loan programs coming out to help first time home buyers. Research each option to find the one that aligns with your financial goals and risk tolerance.

4. Contact Contemporary Mortgage Services, Inc.

Choosing the right lender is a critical step in the mortgage process. A mortgage broker, in particular, can be invaluable in helping you find the best loan terms from a variety of lenders. Unlike banks and direct mortgage companies, mortgage brokers are able to shop through their network of wholesale lenders to find the best loan option for each customers' specific situation. 

5. Pre-approval Process

Obtaining a pre-approval letter from a lender adds weight to your offer when you find your dream home. During this process, the lender will review your financial documents and credit history to determine the loan amount you qualify for. Pre-approval not only boosts your credibility with sellers but also gives you a clear understanding of your price range.

6. Complete the Application

Once you've found your ideal home, it's time to complete the formal mortgage application. Be prepared to provide detailed financial documentation, including tax returns, pay stubs, bank statements, and other relevant records. The lender will use this information to verify your eligibility and assess your ability to repay the loan.

7. Underwriting and Closing

After you've submitted your application, the lender's underwriting team will review your documentation, perform a thorough credit check, and evaluate the property's value. Once the loan is approved, you'll move on to the closing process. During the closing, you'll sign the final paperwork, pay closing costs, and officially take ownership of the property. 

Securing a mortgage loan may seem like a complex and intimidating process, but with careful preparation and guidance from professionals like us, you can confidently navigate each step. By assessing your finances, understanding your options, and working closely with a mortgage broker, you'll be well on your way to making your homeownership dreams come true. Remember, every journey begins with a single step, and taking these crucial steps mindfully will pave the way for a smooth and successful mortgage loan experience.

Contact us today to begin your journey to homeownership.


Posted by Austin Howland on August 7th, 2023 9:13 PM

Navigating Today's Florida Real Estate Market

Picture of Florida with a Push Pin

Welcome to our latest blog post, where we dive into the dynamic world of Florida's real estate market. Whether you're a first-time homebuyer, a seasoned investor, or looking to relocate to the Sunshine State, understanding the current trends and challenges is vital. In this article, we'll explore the state of Florida's real estate market, analyzing recent developments and providing insights to help you make informed decisions.

1. Flourishing Demand

The Florida real estate market has continued to thrive, attracting buyers from across the nation and even globally. The combination of a warm climate, stunning landscapes, and a diverse lifestyle makes Florida an appealing destination for both primary residences and vacation properties.

2. Rising Property Values

One of the defining characteristics of the Florida real estate market has been its consistent appreciation in property values. In recent years, property prices have experienced steady growth due to a combination of factors, such as limited housing inventory, population influx, and robust economic conditions.

3. Limited Housing Inventory

Despite the robust demand, Florida has faced a challenge with limited housing inventory, particularly in sought-after locations. The scarcity of available properties has fueled competition among buyers, leading to multiple offers and higher bidding prices. This trend has been particularly noticeable in urban areas and coastal regions.

4. The Impact of Remote Work

The advent of remote work has played a significant role in shaping the Florida real estate market. As more companies embrace flexible work arrangements, many professionals are choosing to relocate to Florida for its desirable lifestyle and cost of living advantages. This has sparked a rise in demand for suburban and rural properties, away from traditional urban centers.

5. Interest Rates and Financing Options

The state of the real estate market in Florida is also influenced by interest rates and financing options. Borrowing costs have remained relatively low in recent years, making homeownership more accessible to a broader segment of the population. As a mortgage broker, it's essential to stay up-to-date with the latest interest rate trends and loan products to offer your clients the best possible solutions.

6. Resilience Amidst Challenges

While the Florida real estate market has seen incredible growth, it has also faced challenges. Natural disasters, such as hurricanes and flooding, can impact property values and insurance rates in affected regions. Additionally, as with any real estate market, fluctuations in the economy can influence buyer behavior and market dynamics.

7. Expert Guidance is Key

Navigating the complexities of the Florida real estate market can be a daunting task. As a mortgage broker, you play a crucial role in guiding clients through the process of securing the right financing for their dream home. Your expertise in the intricacies of the local market and up-to-date knowledge on loan programs will be invaluable in helping clients make sound financial decisions.


The Florida real estate market continues to be a vibrant and enticing landscape, attracting a diverse range of homebuyers and investors. With rising property values, limited housing inventory, and the influence of remote work, this market offers both opportunities and challenges. As a mortgage broker, staying well-informed about the latest trends and developments will empower you to provide exceptional service to your clients. By understanding the dynamics of the Florida real estate market, you can better assist your clients in achieving their homeownership dreams.

Remember, at Contemporary Mortgage Services, Inc., we are committed to assisting you throughout your real estate journey, offering expert guidance and tailored financial solutions. Together, let's make your Florida homeownership dreams a reality! Contact us today!


Posted by Austin Howland on August 7th, 2023 9:12 PM

What are Debt-to-Income Ratios?

How do They Impact Qualifying for a Mortgage?

Debt to Income Balance

When it comes to applying for a mortgage, understanding your financial standing is crucial. Lenders assess various factors to determine your eligibility, and one significant aspect they consider is your debt-to-income ratio (DTI). In this blog post, we will explore what DTI ratios are, why they matter, and how they can affect your chances of qualifying for a mortgage.

(NOTE: In this blog post you may see the acronym PITIA referenced. This stands for: Principal, Interest, Taxes, Insurance & Association Dues. It represents your total monthly housing payment.)

What is a Debt-to-Income Ratio?

A debt-to-income ratio (aka DTI) is a financial measurement that compares your monthly debt obligations to your gross monthly income. It provides lenders with insights into your ability to manage additional debt and make timely mortgage payments. This ratio is calculated by dividing your total monthly debt payments by your gross monthly income and multiplying the result by 100.

Mortgage Brokers, like Contemporary Mortgage Services, Inc., use this DTI calculation to determine how much of a monthly PITIA payment a borrower can qualify for and comfortable afford.

Importance of Debt-to-Income Ratios for Mortgage Qualification:

Lenders consider your debt-to-income ratio as a key indicator of your financial stability. It helps them assess the level of risk associated with lending you money for a mortgage. A lower DTI ratio generally indicates a lower risk for lenders, as it suggests that you have a higher capacity to meet your financial obligations. Conversely, a higher DTI ratio indicates a higher level of debt relative to your income, which may raise concerns for lenders.

Acceptable Debt-to-Income Ratios:

The acceptable DTI ratios can vary depending on the type of mortgage and the lender's guidelines. However, in general, most lenders prefer a DTI ratio of 43% or lower. Certain loan programs, such as FHA and VA, typically allow a much higher DTI than Conventional loan programs. However, Conventional loan programs, will also accept a higher DTI, when there are compensating factors (i.e. additional assets left over, good credit history and score, high down payment, etc...)

There are two main types of DTI ratios that lenders consider:

1. Front-End DTI Ratio:

   - This ratio measures your housing-related expenses (e.g., mortgage payments, property taxes, insurance) against your gross income.

   - Ideally, your front-end DTI ratio should be 28% or lower.

Calculation: Total Monthly Housing Payment (PITIA) / Total Monthly Gross Income = Front-End Ratio

2. Back-End DTI Ratio:

   - This ratio includes all your monthly debt obligations, including housing expenses.

   - For most lenders, the maximum back-end DTI ratio they accept is around 36%.

Calculation: Total Monthly Housing Payment (PITIA) + Monthly Debt Payments / Total Monthly Gross Income = Back-End Ratio

(Click HERE to see more examples on how these ratios are calculated)

Effectively Managing Your Debt-to-Income Ratio:

If your DTI ratio is higher than desired, there are steps you can take to improve it and increase your chances of qualifying for a mortgage:

  1. Reduce Existing Debts:
    •  Focus on Paying down your outstanding debts. This will lower your DTI ratio and demonstrate your ability to manage your financial obligations responsibly.
  2.  Increase Your Income:
    • Consider options to increase your income, such as taking on a part-time job, freelancing, or pursuing additional educational opportunities that could lead to higher-paying employment.
  3.  Avoid Taking on New Debts:
    •  Minimize new credit applications and large purchases that could increase your debt load. Keep your financial commitments manageable.


Understanding your debt-to-income ratio and its impact on qualifying for a mortgage is essential when pursuing homeownership. Lenders carefully analyze this ratio to evaluate your financial stability and assess the level of risk associated with lending to you. By maintaining a healthy DTI ratio and effectively managing your debts, you can enhance your chances of securing a mortgage and realizing your dream of owning a home.

Contact Us Today to Learn More:

Navigating the mortgage qualification process can be complex, but you don't have to do it alone. As a trusted mortgage broker, we have the expertise and resources to help you understand and improve your debt-to-income ratio. Contact us today to learn more about how we can assist you in finding the right mortgage options tailored to your unique financial situation. Let us guide you towards achieving your homeownership goals.

To learn more about Debt-to-Income ratios and to see example calculations, check out our full webpage on the topic:


Posted by Austin Howland on August 7th, 2023 9:11 PM
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Key Mistakes to Avoid During the Mortgage Loan Process

Navigating the mortgage loan process can be both exciting and daunting. It's important to recognize that lenders carefully evaluate your financial stability and consistency before approving your loan. To increase your chances of a successful mortgage application, it is crucial to avoid certain actions that may raise concerns or disrupt the evaluation process. In this blog post, we will discuss the top things to avoid during the loan process, helping you maintain consistency and enhance your prospects for obtaining a mortgage.

1. Avoid Major Purchases:

When lenders review your loan application, they like to see consistency in your finances. Making significant purchases, such as furniture, appliances, jewelry, vehicles, or vacations, during the loan process can raise red flags. These purchases may increase your debt-to-income ratio or deplete your savings, potentially affecting your ability to qualify for the loan. It is best to postpone major purchases until after your loan has been approved and finalized.

2. Refrain from Changing or Quitting Your Job:

Stability in employment is a crucial factor for lenders assessing your mortgage application. Changing jobs or quitting your current job during the loan process can jeopardize your approval. Lenders prefer borrowers who demonstrate a consistent employment history and stable income. If you are considering a job change, consult with your mortgage professional beforehand to assess any potential impact on your loan application.

3. Don't Make Large Financial Transactions without Talking to Your Loan Originator:

Large transactions involving your bank account can raise concerns for lenders, as they seek to verify the source and destination of funds. Before withdrawing, depositing, or moving significant amounts of money in or out of your bank account, consult with your mortgage professional. They can guide you on the necessary documentation and ensure that the transactions align with the requirements of the loan process.

4. Avoid Paying Off Debts or Collections without Guidance:

While it may seem intuitive to pay off debts or collections before applying for a mortgage, it is crucial to consult with your mortgage professional before doing so. In some cases, paying off debts or collections can impact your credit score or raise questions about the source of funds. Follow the guidance of your mortgage professional to ensure that you make informed decisions regarding debt payments during the loan process.

5. Steer Clear of Cash for Good Faith Deposits:

When it comes to the initial deposit for your home purchase, using cash can lead to complications. Cash transactions are difficult to verify, which may result in delays during the closing process. Instead, opt for traceable payment methods like personal checks or wire transfers for your good faith deposit. These methods provide a clear transaction history that lenders can easily validate.

6. Limit Credit Report Inquiries:

Having your credit report pulled multiple times during the loan process can negatively impact your credit score. While it is necessary for lenders to pull your credit report for the initial mortgage application, refrain from allowing unnecessary credit inquiries. Excessive inquiries can raise concerns about your creditworthiness and potentially lower your credit score. Be mindful of applying for new credit cards or loans until after your mortgage has been finalized.

Why it Matters

During the mortgage loan process, it is essential to maintain consistency in your financial profile and avoid actions that may raise concerns or disrupt the evaluation process. By adhering to the guidelines discussed in this blog post, such as refraining from major purchases, maintaining stable employment, and consulting with your mortgage professional, you can enhance your chances of securing a successful mortgage approval. Remember, clear communication and careful financial planning are key to a smooth loan process, leading you closer to your homeownership goals.

If you would like to learn more tips and guidance on navigating the mortgage loan process, we encourage you to contact us today. Our team of mortgage professionals is here to provide you with personalized advice and assist you every step of the way. Don't hesitate to reach out and take advantage of our expertise. Your dream of homeownership is within reach, and we are here to help you make it a reality.

Contact us today to discover more invaluable insights and secure your path to a successful mortgage application and essentially your new home!


Posted by Austin Howland on August 7th, 2023 9:09 PM
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How Medical Debt Affects Your Credit Score in 2023 

Recent Updates

Photo of Debt Piling Up

Managing medical debt can be a challenging and stressful experience for individuals and families. Not only does it impact your financial well-being, but it can also affect your credit score, making it harder to secure loans or obtain favorable interest rates. However, recent developments in credit reporting practices have brought some positive changes. In this blog post, we will explore how medical debt affects your credit score in 2023 and discuss the significant updates that have occurred to alleviate the burden for many consumers.

1. The Impact of Medical Debt on Credit Scores:

In the past, medical debt had a substantial impact on credit scores, often resulting in lowered scores and reduced access to credit. Delinquent accounts and collections could remain on credit reports for years, hindering individuals' financial prospects. These negative effects were particularly unfair, considering that medical debt is often unexpected and unavoidable.

2. Removal of Paid Medical Collection Debt from Credit Reports:

One significant development that took effect on July 1, 2022, was the removal of paid medical collection debt from U.S. consumer credit reports. Previously, even after paying off medical debts, the collection accounts would remain visible on credit reports, impacting credit scores. This change provides relief for individuals who have successfully settled their medical debts, as it allows them to rebuild their credit profiles without the burden of past collections.

3. Exclusion of Recent Medical Collections from Credit Scoring:

Another crucial modification implemented in 2022 was the exclusion of medical collections less than 12 months old from credit scores. This alteration acknowledges that recent medical debts may not accurately reflect an individual's creditworthiness. By excluding these collections from credit scoring models, individuals can have a fairer chance to demonstrate their financial responsibility, especially when facing temporary medical challenges.

4. Removal of Small Medical Collections:

As of April 11, 2023, the three major credit reporting agencies, Equifax, Experian, and TransUnion, have taken a further step to alleviate the impact of medical debt on credit scores. They have collectively decided to remove all medical collections under $500 from credit reports. This change is estimated to benefit approximately half of those with medical debt on their reports, providing them with an opportunity to rebuild their creditworthiness.


In recent years, significant changes have been made to address the adverse effects of medical debt on credit scores. The removal of paid medical collection debt from credit reports, exclusion of recent medical collections from credit scoring, and the removal of small medical collections under $500 are all positive steps toward a fairer credit reporting system. These changes aim to provide relief to individuals burdened by medical debt and empower them to rebuild their financial standing.

It is essential to stay informed about evolving credit reporting practices and take proactive steps to manage medical debt responsibly. While these changes offer promising improvements, it is still crucial to communicate and negotiate with healthcare providers and billing departments to avoid medical debt in the first place. By staying vigilant and informed, individuals can better navigate the complex landscape of medical debt and protect their credit scores for a brighter financial future.

Contact us today to learn more about the recent updates and how they impact your ability to qualify for a mortgage.


Posted by Austin Howland on May 18th, 2023 7:04 PM

Let us get you in a home with time to settle in before school starts this fall.

We close loans in as little as 14 days so you won't be stuck scrambling to find the bus stop in the morning!

We all know summer is the peak home buying season, and there’s a good reason for it! Summer often presents more opportunities for buyers to get out and about and look at homes, and the weather can be ideal for home shopping and moving, (of course except for the heat sometimes).

Many times, families opt to purchase a home in the summer so that they can get their children settled into a new school district, or specifically the district they desire, by the start of the new school year.

It's also typically better moving weather in most parts of the United States, but of course, the temps can be a little high depending on where you live (here in Central Florida, the heat and humidity will be something to consider!)

People who are looking to move to a place that will shorten their commute time to work will often look at buying a home during the summer. Why? Similar to starting a new school year, lots of people like to take the time to buy a home and move during the summer, when things might be a little bit slower at work (depending of course on what type of job you have!) 

Some experts say that most sellers want to avoid moving during the holidays. That makes summer an ideal time for people to sell their homes.

Some experts have said that historically, there are fewer buyers during the fall season. A lot of times, parents who are homebuyers want to already be settled into that new home by fall -- not moving during the fall.

And hey, if you decide to buy your new home during the summer, there's a great chance you can have a pool party to celebrate your move in day...just sayin'! | 407-834-3377

Posted in:Home Buying and tagged: Closing
Posted by Austin Howland on May 18th, 2023 5:46 PM
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