Tuesday, July 31, 2018

Credit scores and mortgage loan approval

5 Easy Ways to Improve Your Credit Score

1. Get Your Credit Report from any of the 3 Bureaus for Free
Getting a credit score intimidates a lot of people. It can seem like an
uphill battle. However, having good credit will make your life easier.
Once a year you can get a free credit check from
www.annualcreditreport.com/index.action and utilize credit bureaus
such as Experian, Equifax or TransUnion.

2. Remove the Errors from Your Credit Report
The Federal Trade Commission says that 5% of consumers pay more for
insurance and financial services due to errors on their credit reports. And
around 25% of reports contain errors that affect them negatively.
Note anything you see on your report that seems incorrect. This may
include: payments marked late when you paid them on time, negative
marks that should have expired etc. Next file a claim or dispute and the
credit bureau must respond within 30 days.

3. Increase Your Credit Limit
Increasing your limit while keeping your balance the same can help you.
Your credit utilization ratio plays a significant role in influencing your
credit score. This ratio comes down to the total credit you have and how
much you actually use. Bruce McClary, spokesman for the National
Foundation for Credit Counseling, advocates that your ratio stay under

4. Use Your Credit Cards
A 0% credit utilization ratio can actually harm your score. Credit Karma
conducted a study which found that people who had a 0% ratio had a
lower credit score than those that use 1%-20% of their total credit. Use
your credit card wisely and as a tool to build credit.

5. Clear Past Balances and Make Payments on Time
Your payment history affects your score the most. Call your creditor to
arrange a payment plan for your past due accounts. Also ask if that will
rescind the delinquencies on your reports. If not don’t worry just focus
on clearing your past balances. Work out an early notification reminder
of due dates with your card issuer.
Don’t put yourself in a position where you spend more than you can
afford to pay back. Get with a professional that knows the ins and outs.
Contact us today as we will help you and teach you the best ways to
increase and maintain your discipline, when it comes to improving your

Credit scores and mortgage loan approval

Minneapolis / St Paul, MN:  When buying a home, your credit matters. Credit scores and mortgage loan approval go hand in hand, and are one of the most important factors in the loan approval decision.  With places like Credit Karma, and getting your credit score with your credit card statement, most people have a pretty good idea of where they scores average.  But how does that score correlate to mortgage loan approvals, and what credit score do you need for loan approval?
What Credit Scores Mean In Mortgage Approval
Understandably, the better your credit score, the more likely you’ll get approved for a loan, and the more options you’ll have. Also understand that credit score alone does not get you approved like it does in car loans. Mortgage loans still look at many other things, including debt-to-income rations, job stability, size of down payment, past bankruptcies and foreclosures, etc.
Credit score factors

Standard Conventional Loan Scores

  • 740 score and higher = Access to all program options, and the best rates in the market
  • 720 – 739 score = Access to all program options, and maybe a slight increased rate (.125%)
  • 700 – 719 score = Access to most program options, and maybe a slight increased rate (.25%)
  • 680 – 699 score = Some higher risk program options disappear, and a slight increased rate (.375%)
  • 640 – 680 score = All higher risk options go away, and a bigger increase to interest rate (.50%)
  • 620 – 639 score = Very few lenders offer loans in this range
  • 619 or less = Denied

FHA and VA Loan Scores

  • 640 and above = Generally approved, and the best rates available
  • 620 – 639 = Lots of lenders don’t offer below a 620 score, and interest rate slightly higher
  • 580 – 619 = Huge amount of lenders no longer offer FHA or VA loans at this score level, and rates .50% higher
  • 500 – 579 = Very limited number of lenders offer these loans. Very hard to get approved. Minimum down payment jumps to 10% for FHA loans.  Rate easily .50% higher or more.
Other factors also come into play, for example, most down payment assistance programs are not available with credit scores below 640.
Clearly credit is important in the mortgage loan approval process. Always best do work on improving credit before applying for a home loan.

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 MB73346

Text/call 502-905-3708



Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

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