In addition to an active purchase market we are in the middle of a mini refinance boom right now. Many people are looking to take advantage of their home’s appreciation and the super-low interest rates to improve their repayment terms by refinancing their current home loans. As always is the case credit score plays a big role in determining someone’s final interest rate. What you may not know is that credit-score requirements for home loans are broken down into 20 point tiers. They typically start at 580 and cap out at 740. The tiers start at 580, 600, 620, and so on until you reach 740. While the credit score range is much broader than that (the range is 300-850) what those numbers mean is if you have a credit score lower than 580 we need to spend some time improving/repairing it before you apply for a home loan and if your score is 740+ then there is no need to improve your score prior to applying for a home loan. But what if your credit score is a 671 and you’re wondering what credit score improvement could mean to your final interest rate? How do you start that process prior to applying for a loan? We can show you exactly what to do by running a “what if” simulator. This simulator let’s us run several scenarios that tell you
Unknown Credit issues. More often than not we see items on people’s credit that they did not know where there. And as I’m sure you guessed it, any surprise on a credit report is an unwelcome one. The main down side to discovering an issue on your credit in this scenario, is that you are discovering it at the time you want to purchase or refinance. Most credit issues can be resolved with a little bit of work and communication, however out about them at the time you are trying to purchase or refinance may end up holding you back from your ultimate goal. So if you identify yourself in the category of people who are getting ready but not quite ready to buy or refinance, the “thinking about it” club, then I strongly suggest taking a look at your credit before you have your heart set on that new home or low interest rate, and if your reading this post, the next step is as simple as clicking my email below, and we can get you into a position where hen the time is right, you are truly ready to buy or refinance. No surprises. Scott@GreenMeansGrow.com
June is National Homeownership Month, so it’s an appropriate time to ask: Have you ever thought about buying your own home? Surprisingly, rates fell during Q2 2014 which means it could be the perfect time to get started. Owning your own home can help you build a strong foundation for the future. It can bring financial security for your family and stability for your children. It creates community stakeholders who have a vested interest in their neighborhoods. The first stop on the road to homeownership is your credit. The reason for pulling a credit report is to see exactly how credit healthy you are which will allow you to take an informed next step. If it could use a boost when is the best time to repair credit? The answer is always yesterday. Credit repair is time consuming and the sooner you start the better off you’ll be. With an improved credit score of say 50 points could mean thousands of dollars in savings over the life of your loan. With homeownership being a long-term asset making the investment now to improve your credit will no doubt pay for itself down the road. And remember this will also improve the terms for anything you finance like cars, credit cards, and student loans. You might be thinking that if you take six months to improve or repair your credit
From moodys.com Slowdown in mortgage refinancing is credit positive for new jumbo RMBS. A slowdown stemming from higher interest rates will be credit positive for new jumbo RMBS if it boosts the volume of purchase loans in securitizations because purchase loans generally default at a lower rate than refinance loans. The lending environment is likely to lead to higher proportions of purchase loans in RMBS pools over the next several years because further interest rate increases are likely. The higher credit quality of purchase loan borrowers compared with borrowers who refinance explains some of the performance differential; however, purchase mortgages are also generally stronger because originators have typically subjected purchase loan borrowers to stricter credit reviews and property valuations. David Hughson 858-863-
With the housing market crash not too far behind us, many folks wonder How and When they can get back into the Market after a major credit problem. Here are the current waiting periods for buyers after a Foreclosure, Short Sale, or Bankruptcy. * Foreclosure = 3 years Minimum, possibly as little as 12 months * Short Sale = Typically 2-3 years, but potential no wait under certain circumstances * Chapter 7 BK = 2 Years from discharge date, with re-established good credit * Chapter 13 BK = 1 year through the payout period with perfect repayment history But be careful, this isn’t the whole story! Depending on which of the above challenges you’ve experienced, there are likely to be some additional requirements. These can range from simply reestablishing good credit, larger down payment requirements, or ensuring the bad debts are reported correctly. For a custom review of your unique situation Click Here and let me know your situation. From there we can determine exactly when you can buy your next home, and if there are any tricks to make that happen more quickly. Jeremy Beck | Mortgage Planner | 2nd Chance Specialist
Because I help a lot of First Time Homebuyers and Families on the Grow, I’m often asked what is the Best / Fastest / Easiest way to improve your credit before buying a home. Well the truth is that your credit report and score are much like a finger print. They are very unique and specific to you and your history. But there are 3 quick and easy things just about everyone can do to ensure they have the best score possible when getting pre-approved for a home loan. Of course the first thing to do is get a copy of your credit report. That may mean using some internet option, or contacting someone like me who can pull your report and guide you through reviewing it. Then 1- Make current ANY bad debts – This may seem obvious, but I can’t tell you how many times I meet folks with a delinquent parking ticket or something that they “didn’t deserve”. See the thing is your credit score doesn’t take into consideration if you “deserved it” or not. If it’s on there, then it effects you. So pay off that $20 parking ticket as it’ll save you much more over time to have a better score 2- Lower your debt ratios – Keep your debts below 25% of your available credit limit if possible. Often I see folks with only
The Hardest and Easiest Home Loans to Get By: Chris Birk It seems the Great Thaw may be upon us. Credit score requirements have loosened in recent months, a sign that at least some mortgage lenders are starting to take a softer approach after years of tight lending. Nearly a third of all successful mortgage applications in August featured FICO scores below 700, according to mortgage technology behemoth Ellie Mae. In August 2012, only about 15% of green-lighted borrowers had a sub-700 score. Conventional Loans Conventional home loans are “conventional” because they don’t come with a government backing and generally conform to requirements set by Fannie Mae and Freddie Mac, the biggest purchasers of home loans issued by private lenders. Conventional loans are traditionally tougher to obtain than government-backed mortgages, and that’s still pretty much the case today. Conventional lenders are generally looking for a credit score of at least 740, which is higher than the typical minimum score required for government-backed loans. The average credit score for conventional borrowers in August was 758, according to the Ellie Mae report. You’ll typically need a down payment of at least 5% to secure a conventional loan. Usually anything shy of 20% will require the added expense of monthly mortgage insurance, which you’ll pay until you reach a loan-to-value ratio of 80%. The exact amount will vary based on your down payment,
Did you, or someone you might know, get bit with the Short Sale, Foreclosure, or, things just got super complicated bug during the Big Housing Bust? Well heres how to buy a home after a foreclosure or a short sale: Check this out: FHA wants to save the day by “fast tracking” you right back into home ownership. What are they looking for? Minimum 12 months of distance between “the event”, and now, and they want to see what you did about since. Like, did you take the time and energy to rebuild some credit afterwards? While its NOT important that you know what they will consider rebuilding and what they wont, what IS important is that you get into a conversation with a qualified Mortgage Professional (like us) who can walk you through your options today. You can start by calling me and I’ll be happy to introduce you to one of our guys who can help you from there. Jesse Ibanez 858-863-
The implementation of the Qualified Mortgage guidelines (aka QM loans) is now two months away and set to begin in January of 2014. According to the CFPB (Consumer Financial Protection Bureau) here is a list of what loan originators must take into account when evaluating a borrower and their ability to repay: All pretty standard and nothing new, right? Right. Every creditor asks the same four questions when considering whether or not to extend credit. Those four questions are; What do your make?, What do your owe?, What do you have?, and What does your credit look like? This is true whether you are purchasing a home, buying a car, or filling out a credit card application. The answers to those four questions tell the creditor how likely they are to be paid back by you and paid back on time. With the elimination of risky mortgages, you know, the ones with pre-payment penalties, negative amortization, and $0 down payment, the ability to repay has been answered because the guidelines stated above have always been in place. They exist in the domain called “fully-documented” loans and they represent the best credit risk. Meaning, if you have stable income, a decent credit score, a little money in the bank, and a reasonable amount of consumer debt you are a worthy credit risk. The point is that if these factors are in
In an effort to clean up their credit, many folks Dispute items on their credit reports. That’s a common method for fighting things that you feel you do not owe or shouldn’t be on your report. But what most people don’t know is that can actually hurt your ability to get financing on your home. Lenders have now found out that when you have an item marked as “Disputed” on your report, your scores are not accurately reflected as they would be if that item was not disputed. So, in order to get a loan for refinancing or purchasing a home Lenders now require you to remove those dispute marks. That can be a little intimidating and even tricky. But before you go pay some credit company hundreds or even thousands of dollars, try these simple steps yourself. It should save you time, money, and some headaches. Start with the Credit Bureaus – Call them or go online and ask for the dispute remarks to be removed. If you have a credit report already you can get the contact info there. Or you can goto www.annualcreditreport.com You can also call the creditor directly and let them know that you are not disputing the item. They can then remove the Dispute Remark next time they report to the bureaus. Finally, if you can’t get it fixed call me! We do this
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