Credit Keys and helpful mortgage-hunting hints are seldom plentiful on the Internet. However helpful real estate hunting hints and house-hunting tips are plentiful. Thus we decided to bring you the credit keys and helpful mortgage-hunting hints you must know before you buy. And we believe you should know about these credit keys before you hunt for a house. That’s right, you need to mortgage-hunt before you house hunt.
Mortgage-hunting Comes Before House-hunting
House hunters are changing into homeowners here in Winter Park Florida. We are living in an era where mortgage hunters can still find low rates in an atmosphere of a bustling economy.
Home mortgage applications can be complex. Many house hunters are shocked at the difficulties they encounter in the application process. However, if you shop for a mortgage before you shop for a house, you will stress much less.
When you close on your house, we want you to do so with legal and financial clarity. Find your mortgages situation before you find your house. And don’t worry, we will stay with you every step of the way in the mortgage shopping experience.
A Few Words of Encouragement
The paperwork behind a mortgage application can be daunting. We have said previously, “Keep your eye on the prize during the mortgage procedures, and you will decide the meticulous paperwork was worth the trouble.”
So this week we bring you some helpful hints for finding your dream mortgage situation before you see your dream house. In a very real way, these helpful hints bring you some keys, not house keys or car keys, but credit keys that unlock your financial future.
John Ulzheimer of Vantage Score says, “Before you think about applying for a mortgage loan, there are a few things to keep in mind so you don’t accidentally blow your chances of being approved.”
Number 1 of Six Credit Keys: Lenders Review Everything about Your Credit
Buying a house is different from buying a car or getting a big fat credit card approved. For cars or cards, the lender will typically access only one credit report. This is not so in the case of buying a house. Palm State wants you to know that lenders will review all of your credit reports.
The Credit key here is that lenders will check all three of the CRCs: Equifax, Experian, and TransUnion. Ulzheimer reports, “In the mortgage environment, however, the lender will likely pull credit reports from all three CRCs.”
Number 2 of Your Credit Keys: Partners Get a Review Too!
You might be purchasing a house together with a spouse, family member, friend or business associate. Three credit reports will be also be checked in that person’s name as well.
Number 3 of Your Credit Keys: Please Preview Your Credit Reports:
Please realize, problems with your application can arise from errors or negative information on any of your credit reports. Of course, your mortgage lender is going to notice them. So, here’s your homework: Preview your credit reports. There’s magic in this key. Preview your reports. Fix errors. Only after this homework are you are ready to house-hunt.
Previewing your credit reports will give you the opportunity to correct any errors that might exist. Are you aware, that at this point, you can solve any credit situations that might destroy your chances for loan approval on a house?
Number 4 of Your Credit Keys: Make Note of the Middle-of-the-Road Score:
Experts say, “When a lender pulls three or six credit reports, it also will see three or six credit scores. Credit scores are calculated on an individual credit-report-by-credit-report basis. So, six credit reports mean six credit scores.”
The big credit key in this point is that you will not have the same scores from all 3 CRC’s.
The mortgage lenders will decide on which score or scores to base its loan decisions. The typical practice is to select the middle score for each applicant.
Then the lender will set appropriate loan terms, including your interest rate. This rate is based at least partially on your scores.
Let’s look at the math. Let’s say your reported scores are 700, 680 and 675. The lenders will lenders ignore the high number and throw away the low number. The Credit Key here is that the lenders will base your loan on the 680.
Number Five of Your Credit Keys: Put Your Best Foot Forward.
Undoubtedly you want to know how to improve your credit scores. We keep this credit key very simple at Palm State: Just pay off your credit card debt. In the weeks and months before your loan application, we hope you will pay down your credit card debt. Then, keep those balances low. Automatically, this fiscal move will improve all your credit scores. Read more about how to use credit cards at this helpful source.
Number Six of Your Credit Keys: Beware, Lenders Can Take a Second Look at Your Scores
Once you have begun the mortgage-seeking endeavor, do not make new debts. You won’t shop for new furniture with a credit card. You won’t buy a new car or take a credit-financed vacation. Simply put, you avoid making new debts until you have closed on your house.
Remember, just because you have been approved, does not mean you won’t be examined again.
The legal basis reads, “In 2010 Fannie Mae introduced its Loan Quality Initiative” (LQI), which is meant, in part, to “ensure that the loan meets credit standards.” This legislation encourages lenders to take a second look at your reports and scores. And this will typically occur right before closing. Check out more about the in-depth quality investigation at this reliable online resource.
Terrific Take-Aways With Your Credit Keys
Remember, lenders will notice changes in your credit quality, and they do not like new debt.
Palm State Mortgage Company points out to all its home mortgage shoppers that this “is a time of great scrutiny on borrowers’ creditworthiness.”
We invite you to use our six simple credit keys, listed above to unlock the mysteries of your credit profile. Do this before you apply for a home loan. They put some logic and practicality in the dreamy process of house hunting.
As we have said previously, “When you go on a date or out into society, you always want to look your best. Likewise, when you court lenders for the best mortgage deal, you want your application to look financially attractive.”
We thank you for reading the Palm State Mortgage Blog today. Come back again for more practical information about finding the perfect loan situation. We can help you transform from a renter to a homeowner, one step at a time.