So you want to buy a house. It’s always best to start from the beginning, uhhhhh, no duh.
Mortgage qualifying can be easy if you have the proper education on what to do. There are three main aspects that are considered when qualifying for a mortgage, credit, income and assets. Over the next couple weeks and several articles I am going to cover them in a broad sense. I will cover them in more detail in subsequent articles.
Credit
While there are 3 major aspects to qualifying this one is the most important. You can earn a lot of money and have a lot of money saved in the bank and your 401(k) plan. However, if you have a credit score that is below the underwriting requirements you won’t be able to qualify. Since the real estate crash of 2008 minimum credit score requirements have gone up. When I pull a credit report to examine your credit worthiness I must look to see if your credit score meets the minimum requirement for the loan program that best fits your needs. Don’t worry.
We typically get three credit scores. We throw out the high score and the low score and use the middle score. If you have two scores that are the same and they are below your high score, we use that score. If you have only two scores we use the low of those two. If you are making a joint (not that kind of joint) application (applying with someone else) we will determine the middle credit score for both borrowers and then use the lower of those two. Get the concept? Anyone remember the game show ‘The Weakest Link’? We use the weakest link for mortgage qualifying. It all has to do with risk.
Those pesky credit scores.
There is a lot of noise about credit scores. A lot of companies want you to spend a lot of money to purchase your credit scores from them. Let me tell you this. The scores you get from these companies mean absolutely nothing to a mortgage company. I know. You say WHAT?! Unfortunately I am unable to use these scores. I must use the scores we obtain from what is called a Residential Mortgage Credit Report (RMCR). These are the scores we will use for mortgage qualifying. Not that the scores you get from these agencies are bogus. They are generally only a guideline as to your overall credit health. Mortgage qualifying is a whole different ball game than getting a credit card or a car loan.
How do I check on my credit health?
The federal government has made it a law that each of the three major credit reporting agencies, Trans Union, Equifax and Experian must provide you a copy of your credit report to you for FREE once a year when you request it. To get your FREE credit report you must submit your request through www.annualcreditreport.com. Make sure you get a copy of your report from each agency. This must be done because your creditors do not always report to all three agencies. So if you order just the Trans Union report you will not see something that is reported to Equifax and Experian.
I am in the business of getting loans approved. My goal is to get you your loan. I am not some scary big bank guy. I am on your side. I will work with you to get you in a position so that you can buy the home of your dreams if you are not already in that position. I am your advocate.
Feel free to contact me if you have additional questions about mortgage qualifying.. Visit my blog site at http://www.pamortgagepro.com for valuable tips and topics regarding mortgage qualifying. Remember, if you want a mortgage just Google Gregory Zembower.
