Anyone with email these days is bombarded with ads for Mortgages. refinance now, lowest rates, easy terms, lower your payments, Buy a new home with 0 down!, etc.. etc..
Yes, All these things can be had and /or done IF you meet the criteria that they require.
In reality, the Bank's decision to approve a loan is based heavily on several things:
1. Is the borrower employed in the same line of work or business for at least 2 years?
2. Can the Borrower document their income for this time period ( w2's, Tax returns, pay stubs, etc..)
3. CREDIT. Do they have Credit scores above 620 (this would be a low score) for both borrowers?
4. Property. Is it sellable, valued correctly, in a good location, livable etc...
I have been in this business for over a decade and I can tell you that all of these things are important but THE FIRST thing we all look at is the borrowers credit !! You see, even if the borrowers are perfect in every other aspect, a low credit score will kill the deal. There can be some exceptions in the other areas but credit leaves no room for error.
Let me list some of the things that can keep even the finest borrowers from getting a loan approval:
1. bankruptcy in the last 10 years
2. Tax Liens
3. Credit card lates in the last 2 years ( this could be just one 30 day late ! )
4. Repossession of a Vehicle, both voluntary and involuntary.
5. Behind on Child support
6. Behind on Spousal support
7. Debt Consolidation
8. Consumer Credit Counseling
9. Judgements
10. Property Liens
11. Several lines of credit with no balance
12. Too many Credit Cards
There are MANY other things that can be on a credit report that are negative but I like to call these the dastardly dozen.
These are the big No-No's and can keep you from not only getting a home loan but can also keep you from qualifying for the lower interest rates. The lower the interest rate, the lower your payments.
In my next post I will discuss how Borrowers can take charge of their credit.
DON'T REPAIR IT, RESTORE IT !!
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