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Category: Credit information/Credit Scoring
Too often, mortgage borrowers are rejected for a home loan on the basis of poor credit. Whether you’re in the market for a purchase-money mortgage, a refinance or even a home equity loan, coming to a lender with a strong credit score–especially in this present environment–will truly increase your chances of success….click below for entire article
Credit scores improve, Top Ways to Manage Your Debt Ratio.
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Twin Cities Real Estate Blog – The Home Buyer Financing Fallacy – click for more information.
Today people need to be able to demonstrate a history of managing their credit well – i.e. making payments on time, having other loans/credit cards, etc. They also need to have a stable career, which typically means 2 years of job history in their current line of work (schooling is taken into account for recent grads). Finally, they have to have 3.5% down payment money, most of which can be gifted to them from a family member if necessary. Does that sound crazy to you?
What has really made life tougher is that now each loan has no margin for error. Each loan application is being reviewed, re-reviewed and reviewed again. The underwriting department will often come up with what seems like crazy requests for documenting every last item of your credit and income. While this can seem very overblown, they are doing so because they don’t want to go through a single new foreclosure if they can help it. Unless you lied or “forgot” to mention something on your credit app, almost all buyers are still making it to the closing table… though sometimes a few days later than planned…….
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Credit Scores » What Makes Up a Credit Score? How a Bad Credit Score Affects Your Life, Reason to Retain Old Credit Accounts, Rebuild Credit And Scores – click here for much more.
- Keep that old, unused credit account open, it just may be the best contributing factor to your credit score
- The obvious ways bad credit affects consumers is known but bad credit can affect basic needs such as car insurance rates, renting and employment opportunities.
- Credit scores do not have to be a mystery. Learn the 5 components that make up a credit score and how to use them to improve your credit scores.
- The mortgage loan assistance programs meant to help homeowners avoid foreclosure and modify mortgage loans can reduce credit scores as much as 100 points. and more…….
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Home Equity Lines of Credit and Your
Credit Score
What You Need to Know and Do
Now more than ever, you need to make sure you understand what’s on your credit report – and you need to know what steps you can take to improve your score. For example, did you know that a Home Equity Line of Credit (HELOC) can impact your credit score quite dramatically – and sometimes unfairly – depending on how it is reported?
Here’s What You Need to Know… and Do!
Click for more information: Practical Financial Tips Newsletter (2nd Quarter 2011)
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Click for more information –
FHA: A bigger down payment isn’t necessarily better
…………Working from FHA loan guidelines and experience, Ryan explained that the need for a high down payment can be off-set with a solid credit rating:
FHA uses both downpayment and FICO scores to allocate credit assistance, which, together, we have found to be a much better predictor of loan performance than just one of those components alone. For instance, FHA insured loans with LTV above 95% and a FICO score above 580 perform better than loans with LTV below 95% and a FICO score below 580, while loans with a LTV above 95% and a FICO score below 580 perform significantly worse than all other groups, as illustrated below.
Translation: The FHA has found that a high credit score is a better predictor of loan success than a larger down payment.
There is now some discussion regarding whether to require loans with at least 10 percent down to automatically qualify for the QRM standing, or whether the down payment standard should be higher or lower.
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Click for information -Trigger Leads: Don’t Be Exploited by the Credit Bureaus.
As you embark on what is likely the largest financial transaction of your life, you should place yourself in the hands of a professional – not some transactional loan officer who purchased your information from the credit bureaus. Remember, only a limited number of sources exist for lenders to obtain mortgage money, so it’s extremely unlikely that a borrower will find an unbelievably low rate without an unbelievably high cost.
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The effects of a low credit score range from a small bump in the road to a huge painful brick wall standing in front of your dreams. Below are the most common effects of a low credit score.
Click here: THE AFFECTS OF A LOW CREDIT SCORE
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Click to Learn About A New Way to Improve Your Credit.
When it comes to credit history and credit score, renting doesn’t get much respect. Unlike homeowners whose credit benefits from on-time mortgage payments, renters don’t see any positive effects on their credit from making rent payments on time. But that’s starting to change.
Experian now is including rental payment histories in its credit reports and scores. That’s because it recently bought RentBureau, a credit bureau that receives rental payment histories from apartment owners and managers.
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How will a short sale effect my credit?
The repositories are starting to address how to report a short sale and they should have two new classifications to handle the modified loan classification. It is unclear at this time if FICO will view these designations as derogatory but I would suspect that it will only be an adjustment from a normal paid mortgage account.
Click to View – How Will A
Short Sale Affect My Credit Rating?
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