Mortgage Talk

Credit Scores
From The Desk of Jonathan Cherry 2:30 1/25/12

When applying for CREDIT Lenders look at the risk they are taking by lending money to you. Your FICO® scores are the credit scores most lenders use while determining your credit risk. Most consumers I work with do not realize that three separate bureaus report scores. TransUnion, Experian, and Equifax, in the mortgage industry we use the middle of the three scores. However not all lending institutions use all three. Each Score is based on information that has been reported on you, and kept on file with the different credit bureaus. When this information changes the scores change also. The three FICO scores can affect the loan amount and the terms offered for the loan. It can affect the interest rate, down payment, and whether you can obtain a new loan. It is important to monitor your credit score, and consistently take steps to improve your FICO scores. This will increase your future ability to obtain loans, and better rates from lenders.
In order for the FICO, or credit score to be calculated, each of the 3 credit reports must have a minimum of 1 trade line, or account that has been open for at least 6 months. The accounts also must have been updated in the last six months. This allows enough information and recent history in your credit report where the FICO score is calculated on the report. Some recent changes in the mortgage lending industry also require a certain number of trade lines with at least 12 months of clean history in order to meet guidelines. Some programs allow the use of alternative trade lines like utility bills, cable bills, cell phone bills, or memberships to cover the trade line requirements. However those items do not show up on your credit typically unless your account goes into collection and that can negatively impact your score.
Credit seems to be the biggest mystery for clients when they talk to me. So over the next week I am going to discuss different topics about credit. It is a good practice to check your bureaus once a year to make sure the information is correct.

Will I Qualify For a Mortgage
%u200BFrom The Desk of Jonathan Cherry II 12/9/11

Big Question right now, and a lot of bad information about obtaining a mortgage.
Myth 1 You have to have perfect credit. Not true I have done loans with as low as 620 credit scores in the past year. Not to mention sometimes it is very simple solutions to REPAIR YOUR CREDIT score.

Myth 2 You need 20% down to buy a home. Not true the 620 credit score above actually only put down 3.5%%u200B%u200B%u200B%u200B%u200B%u200B%u200B on a 30 year fixed loan at 4.25%. If you are a veteran its a 100% financing, and if you live in a rural community usda is a 100% option. We can also look at bond options that provide a grant for your down payment like THDA.

Those are two of the most confused questions people have. So if you would like to explore a mortgage option give me a call, and lets find the best option for you.