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why am I going thru all of this? I just want to get my Tax Return completed and filed.
thank you all and a lady who really took care of me yesterday she was great
Mortgage Underwiter here . I know someone said we don’t look at credit scores and unfortunately that is not entirely true. The break point for the credit score depends on the type of loan you are interested in. For example, if you are going with a government loan such as an FHA loan or a Bond loan you could be as low as a 620 depending on your situation. The problem with this is the lower your score the higher your points and interest rate which translate to higher monthly payments or even mortgage insurance (with FHA you will have to pay MIP regardless).
Some sound advice from someone with too many years experience to share without aging myself who also survived the huge housing collapse. Don’t even look for a mortgage loan until your “mid-score” is 680. Anything lower than that and you’re looking high risk lending (potentially subprime lending). Patience and a consistent repayment history is key, your credit score is earned overtime and no one really knows 100% how it’s calculated. It’s called “Black box technology”, only the developers working for the credit bureaus fully understand the technology because it’s situational.
Another quick tip, if you have decent repayment history but hit a “rough spot”, document it. Most underwriters will work with you if you can explain why you had issues and have since gotten back on track. Also, with mortgages you can use non-traditional credit (things you pay monthly to companies that do not report to a credit bureau) some examples would be; electric bill, gas bill, cell phone, rent payment, even personal loans as long as you can provide copies of monthly checks or money orders issued for payment.
I hope this helps and good luck on your home search!!
Also, it is better or easier to get a home loan first then an auto loan … and this could be directly related to credit scores … or not? But, life of course can't always play out like that. Because it's a relatively new car loan … wait until the car is almost paid off … (less than 6-9 months) with on time payments of course to apply for a home loan. Presuming you aren't in a rush and how long the car loan is for. Otherwise, pay more than the minimum payment every month; even if only an extra $5 or $10 dollars. The same with any credit card(s) you may have. Do this for a solid year before buying the home and watch how those scores improve. Do not pay off the credit cards in full unless a bank ask you to "qualify" for a certain loan amount. This is based on debt credit ratio … and not necessarily to improve the score. It may in fact lower your score to pay off in full. Thus, let the banking or loan institution 'see' the highest score first … and they will at times advice some customers to pay off a credit card to help get approved. But, that's more related to expected future monthly payments. That is rare … so don't be worried. Better to save the money to pay off a credit card or two and enough for down payment and closing costs … and see what different institutions suggest. (I wouldn't offer to pay them off up front either … only if you don't like their deal or interest rate offered.)
Won’t leaving a $1 balance when paying credit card statements subject you to a penalty? Don’t most cards base their penalties for lack of payment of the complete balance on a percentage of the average of your balance for the last month?
thanks for the advise, as a senior I', not buying as much and the $1 carryover is a great way to raise the score.
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