Archive for Credit Score
What Does Your Credit Really Look Like
Posted by: | Comments
You’ve seen the multitude of ads, commercials, and I’m sure you’ve even been barraged with mailers too, that say Call today for your free credit report.
But how do you know which, if any, are legit?
As a consumer myself, I often find all the advertisements to be overwhelming and that is why today, I want to share a quick tip with you on the three reputable means to obtain your own copy of your credit report-take action and get a complete picture of your credit situation so that you can have financial freedom!
I really appreciate you coming back to look around. If you know of anyone else you think might enjoy my blog, please don't keep me a secret.
Achieving a Goal Credit Score
Posted by: | Comments
I’m sure it’s no surprise to you that today’s economy has produced a hostile credit environment, and credit has become a major concern for all consumers. This is why I am even more committed to helping you take control of your financial future, so that not only do you qualify for the lowest possible home loan interest rate, but you are also in position of financial freedom at all times-when financing a car, shopping for insurance, applying for a job, and so on.
With this in mind, I am sending you a quick tip on how to take action so YOU can have control of your overall financial health.
Tune in to this quick video segment and in less than ten minutes, you will learn how to set a realistic score goal, how long it might take to reach your score goal, what a good score is considered to be and how having a good score can save you thousands of dollars.
If you cannot view the above video please view at Indiana’s USDA Loan Expert website.
Increase Your Credit Score in 30 Days
Posted by: | Comments
Author and credit scoring expert Linda Ferrari shares 5 simple things you can do to help raise your credit scores quickly.
If you can’t view the above video, click to learn the 5 things to increase your credit score
Using a USDA Loan to Purchase a Home After a Foreclosure
Posted by: | Comments
- flickr photo by Respres
A lot of homeowners think that after a foreclosure they will never be able to purchase a home again. A foreclosure does hurt your credit in the short term, but it will not keep you from purchasing a home in the future.
The actual foreclosure event will stay on your credit report for seven (7) years.
So, your house was foreclosed on you’ve moved out now what.
You’ll need to start re-building your credit. One thing you’ll need to make sure is keep track of all paper work from the previous mortgage company. Be sure and get a free copy of your credit report from annualcreditreport.com Check your credit report for errors, if there are errors send supporting documentation to the 3 credit bureaus asking that the error be corrected. By law they have 30 days to investigate or they have to remove the item; however, if it is later found that it is accurate, it will be replaced on your credit. The Federal Reserve Board has a flyer to help you entitled, “5 Tips for Improving Your Credit Score.”
Document the circumstances surrounding your foreclosure. What happened that caused the foreclosure to start, loss of job, medical problems, death of spouse, significant other, etc. The underwriter will want to know that the problem is not likely to recur and that you are in a much better ability to pay a mortgage in the future.
You will need 3 years from the date of your foreclosure until you are able to purchase a house using a usda loan, which allow for 100% mortgage financing. In addition to the 3 year time frame you will also in most cases need at least a 620 credit score.
One thing that will help speed the process if you work with your lender prior to the foreclosure through:
- Forbearance. This is an agreement that lets borrowers make a reduced payment, or none, for a specific period. You might have to make larger payments once the crisis has passed. To qualify, you might need to show that you’re expecting a bonus, a tax refund or other income that will let you catch up.
- Reinstatement. You agree to pay the full amount of your missed payments by a specific date. Reinstatement is sometimes combined with forbearance.
- Modification. Your lender agrees to change the terms of the loan to make payments more affordable. Your lender may agree to add missed payments to your loan balance or extend the term of your loan, reducing the size of your payments.
If you are beyond that point or there is just no way you can afford the current mortgage then it is time to move on:
- Work with your lender and ask if they will accept a deed in lieu of foreclosure. This is where you sign the house over to the lender then they do not have to go through the foreclosure process. You will have to move out immediately. The bright spot for you is that you can begin the rebuilding of your credit sooner than if you waited on a foreclosure.
- Sell your home. More than likely you owe more than your home is worth. So, you will need to sell as a “short sale”. You’ll want to contact a short sell investor or a Certified Distressed Home Seller Real Estate Agent. While you may try selling yourself, this will not get you the exposure your home needs to sell quickly.
For a free copy of our Consumer Credit Scoring Booklet, contact Jeremiah Wean.
What’s a Credit Score Got to Do With It?
Posted by: | Comments
With all the recent changes in the lending environment, everyone is asking, “What does my credit score have to be to qualify for $X loan amount?”
The answer will vary based on three factors:
1. What type of Loan Program you utilize
2. If you loan amount you are looking for puts you into the Jumbo Loan Category, presently: $417,000.
3. Whether you need Private Mortgage Insurance
The credit score that is utilized is the lowest middle credit score of all borrowers from the three credit rating agencies, TransUnion, Experian, and Equifax.
USDA Home Loan: A USDA Home Loan is one of the most flexible, when it comes to credit. You will typically only need a 620 credit score to qualify. However, if you do not have any credit, including no collection you can qualify as well. You can still qualify if your score is under 620 as long as there are no collections or judgements or they have been paid off over 12 months ago, and any Bankruptcy has been discharged at least 3 years. To qualify for the best rate you’ll need a 620 credit score. There is no private mortgage insurance needed on a USDA Home Loan, since the loan is guaranteed by USDA. The loan amount is only limited by what you can qualify for. You can borrower up to 100% of the purchase price, plus cover closing costs, depending upon the appraisal. For some of the other benefits of a USDA Home loan please see: The Benefits of a USDA Guaranteed Loan to Purchase.
VA: With a veteran loan you will need at least a 620 credit score. To qualify for the best rate you’ll need a 700 credit score. The maximum loan amount, in Indiana, is $417,000. VA does offer a Jumbo product that allows up to a $650,000 loan amount is a 720 credit score. Since the loan is insured by VA you will not need private mortgage insurance. The maximum LTV is 100%.
Conventional: With a conventional loan, Fannie Mae (FNMA) or Freddie Mac (FHLMC) you will need at least a 620 credit score. A conventional loan does require private mortgage insurance if you loan to value (LTV) is over 80% of the purchase price. To qualify for the best rate you’ll need a 720 credit score. The maximum loan amount, conforming loan limit, is $417,000. The maximum LTV is 95%.
FHA: The minimum credit score to qualify is 640 with some investors requiring a 660 or higher credit score. The maximum loan size is limited by county. The most common loan limit in Indiana is $271,050. To get the best rate you’ll need a 700 credit score. There are no further requirements for mortgage insurance since the loan is insured through HUD. There will be up-front mortgage insurance premium and a monthly mortgage insurance premium. The maximum LTV is 96.5%.
Super Conforming Mortgage: If your loan amount is larger than the conforming loan limit, $417,000 but under $729,750 then you can qualify for a Super Conforming Mortgage with a 620 credit score. To qualify for the best rate on a Super Conforming Mortgage you’ll need a 720 credit score. You will need private mortgage insurance if your LTV is greater than 80% of the purchase price, the maximum LTV is 90%.
Jumbo Loan: If the loan amount you are looking for is over the Super Conforming loan limit, $729,750, you’ll need a 720 credit score. To qualify for the best rate you’ll need an 800 credit score. Since the maximum LTV is 80% you will not need private mortgage insurance. The maximum loan amount is $1,000,000 over that you the loan would go to a Private Lender and rates and terms vary widely.
Private Mortgage Insurance: The underwriting standards surrounding private mortgage insurance are becoming increasingly stricter. Any conventional loan with an LTV greater than 80% will require private mortgage insurance. To qualify for private mortgage insurance you will need a credit score of 680, you can sometimes get better pricing on the mortgage insurance if your credit score is over 700. The cost of the private mortgage insurance is typically a monthly amount added to your mortgage payment; however, there are options for the lender to cover the cost through a higher interest rate or discount points, or some combination of the two.
When you are ready to get started on your loan click on LakewoodLenders.com or call me.
