Obtaining A Mortgage Demands Good A Credit History
June 16, 2010 by Paula D Bryant
Filed under Credit Debt
If you are in the market to purchase a new home or refinance your old home you may have noticed how unpredictable the housing and mortgage market is right now. Lenders are being much more cautious with their lending standards plus they are being very careful about the levels of credit risk that they are willing to take. Even with perfect credit you might have found that refinancing your home or applying for a new mortgage is more difficult than ever.
There have always been guidelines that were in place to determine who will qualify for a mortgage and how much cash an individual can borrow. Most of the guidelines are from the secondary market such as Fannie Mae and Freddie Mac. But in addition, most lenders also have their own in house underwriting guidelines and these are usually stricter than the typical conventional or government guidelines. You may qualify under the main guidelines yet still be denied due to the lenders more strict rules.
When you qualify for a mortgage, the lender will take a close look at your credit rating, your income, your debt to income ratios and your overall ability to repay the mortgage. Prior to the subprime meltdown and the dip in the housing market, you could get a no documentation loan that did not require proof of income. At the moment however, those loans aren’t available as most lenders have increased their standards. The easy loans may be a thing of the past. However, if you have a large down payment that will always enable you to qualify because the loan to value goes down and your loan is more attractive for the lenders.
If you discover that your credit score is to low to qualify with a specific lender you should find out what is necessary for you to qualify. If your score is close, the answer may be as easy as looking for a different lender. You need to realize, however, that every mortgage lender that you contact could feasibly run a credit report and every single inquiry on your credit report will further reduce your score.
It is easier for you to call around and ask the lenders about their conditions for qualification and the credit score that they require. It’s also wise to get your own credit score by asking for your free yearly credit reports and paying the additional $15.00 fee for your credit rating.
If your credit score is lower than it needs to be you can try a few things. If there are things on your credit report that are incorrect and you have the documentation to prove it you can often petition the credit bureaus for a rapid rescore. You may also use this method if you pay your debts down or eliminate them. You just need to ensure that the creditors have updated the information and then request the rapid rescore with the credit bureaus. You may be able to increase your credit rating.
Before you shop for a house and a mortgage make sure that you are comfortable with your potential lender’s guidelines and how high your credit score must be in order for you to to qualify. Then you can take certain steps such as paying down or paying off your balances or even acquiring additional credit in order to raise your debt to available credit ratios.
It may also be smart to contact a established and trusted credit repair service company that is well versed in the actual laws that pertain to what you can do to actually improve your credit rating in a positive and productive manner. Getting your credit score increased as much as possible and getting educated on mortgages and home financing will help you in this current and ever-changing housing market.
Ones credit history is more vital than you may be aware of so for more information about credit repair collections and http://724credit.com check out my website right now.
