Whether you are considering buying or refinancing a home, buying a car, refinancing mortgage card, installment loan, RV loan, motorcycle etc...you need to understand that your credit scores are going to be the first thing a lender is going to consider before they even look at the details of your loan request.
Of course, being in the mortgage business, we see this every single day. And now with the changes in the lending industry all of the lenders, including FHA are considering your credit score to determine the upfront fees necessary and the rate you'll actually pay. If you are looking for a conventional loan and your credit score is under 680 (if more than one person is on the loan the lower of the scores will be used) and your loan-to-value (the amount of the loan relative to the appraised value) is above 70%, you will pay up to 2.25% of the loan amount up front. If you can't pay it up front then the lender will adjust the rate to accommodate the fee. Hence that 6.25% rate you thought you were going to get turns into 6.5 or 6.675 or 6.875 or even worse depending on other rate-pricing adjustments.
If you are seeking an FHA loan then the up front mortgage insurance will range from 1.25 to 2.25% and the monthly premium will be .50 to .55 depending on your score.
Most of the time we get referrals (clients) who are in the process of buying a home and need to obtain their financing immediately. Let me suggest that if you are considering a major purchase and need to finance it, plan ahead.
First go to annualcreditreport.com and obtain one of your reports from the three credit bureaus, Equifax, Transunion or Experian. The report itself is free once each year from each of the bureaus. There is about a $5 charge to get your score with it. This is the only source that is sanctioned by both the FTC refinancing mortgage Trade Commission) and the credit bureau's. Any other "free Credit Report" is not sanctioned and cannot be deemed as reliable or "free".
Once you have your report, first look to see if all of the accounts listed are yours. Make sure you are not a victim of ID theft.
Next, make sure that the accounts are being reported properly. (The high credit limits are accurate and the payment history is also accurate.)
Next see how much of your revolving debt you owe vs. how much available credit you have. This is usually the biggest score dropper people have. The more you owe to your limit the lower your score is going to go.
These are the biggest things that affect your score and can change your score in a hurry, either up or down.
Don Davis
Branch Manager
HighTechLending, Inc
Don can be reached at dond@htlnw.com
Don specializes in residential and commercial lending in and around Snohomish County, Washington.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น