Real Estate Information Archive

Absolutely!  Even if you haven’t so much as picked out houses to visit yet, it’s important to see your mortgage profession first.  Why?  What can we do for you if you haven’t negotiated a price, and don’t know yet how much you want to borrow?

When we as a mortgage bank pre-approve you, we help you determine how much of a monthly mortgage payment you can afford, and how much we can loan you.  We do this by considering your income and debts, your employment and residence situations, your available funds for down payment and required reserves, and some other things. It’s short and to the point, and we keep the paperwork to a minimum!

Once you qualify, we give you a Pre-Approval Letter that you can give to your Realtor.  It states that we have obtained documentation from you, checked your credit, have underwritten your loan and that your loan is approved subject to the appraisal on the home you are purchasing plus any other conditions which are outstanding, such as the sale of a present home.

When you find a house that catches your eye, and you decide to make an offer, being pre-approved for a mortgage will do a couple of things.  First, it lets you know how much you can offer. Your Realtor will help you decide on an appropriate offer to fit your circumstances, but being pre-approved gives you the confidence to know you can follow through.

More importantly, to a home seller, your being pre approved will make your offer stand out, and give you more clout.   You can always use the calculators on my web page (www.marketmortgage.com) to get an idea of how much you can afford, but it’s better to meet and get the pre approval out of the way.  If there are any issues or questions, we can get those resolved up front.  I can also look at many different programs and find the one that best fits your needs!  Please call:

Val Behre

Market Mortgage Co., LTD

614-848-5626

val@marketmortgage.com

Before deciding on what terms they will offer you a loan (which they base on their “risk”), lenders what to know two things about you:  Your ability to pay back the loan, and your willingness to pay back the loan.  For the first, they look at your income to debt obligation ratio.  For your willingness to pay back the loan, they consult your credit score.

The most widely used credit scores are FICO scores, which were developed by Fair Isaac and Company, Inc., (and they’re named after their inventor!).  Your FICO scores are between 350 (high risk) and 850 (low risk).

Credit scores only consider the information contained in your credit profile.  They do not consider your income, savings, down payment amount, or demographic factors like gender, race, nationality or marital status.  In fact, the fact they don’t consider demographic factors is why they were invented in the first place.  Credit scoring was developed as a way to consider only what was relevant to one’s

willingness to repay a loan.

Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores.  Your score considers both positive and negative information in your credit report.  Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score.  

Different portions of your credit history are given different weights.  Thirty-five percent of your FICO score is based on your specific payment history.  Thirty percent is your current level of indebtedness.  Fifteen percent each is the time your open credit has been in use (ten year old accounts are good, six month old ones are not as good) and types of credit available to you (installment loans such as student loans, car loans, etc., versus revolving and debit account like credit cards).  Finally five percent is pursuit of new credit----credit scores requested by creditors.

Your credit report must contain at least one account, which has been open for six months or more, and at least one account that has been updated in the past six months for you to get a credit score.  This ensures that there is enough information in your report to generate an accurate score.  If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage.

Please contact:

Valerie Behre

Loan Account Executive

val@markemortgage.com

It’s virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply.  So the short answer is, you really can’t “on the spot.”  But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date.  Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note:  Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries.  Changes in the law though have made “consumer-originating” credit report requests not count so much.  Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time.  This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what’s on them, and smart consumers shop around for the best mortgage and car loans. 

Unsolicited credit card solicitations in the mail don’t count against your credit scores so don’t worry.

The two main components of your credit score are your payment history and the amounts you owe.  Bankruptcy filings and foreclosures, which can stay on your credit report for as many as 10 years, can significantly lower your score.  It’s never a good idea to take on more credit than you can handle.

Late payments work against you.  It’s extremely important to pay bills on time, even if it’s only the minimum monthly payment.

Don’t “max out” your credit lines.  Since the size of the balance on your open accounts is a factor, lower balances are better.

Don’t close paid off revolving accounts.  If you have paid the accounts in full and you don’t want to use the account any more, destroy the card (s) but leave the accounts open.

Please contact:

Valerie Behre

Loan Account Executive

val@marketmortgage.com