Minimum Credit Scores for Mortgages Spring 2013 Update

May 10, 2013 by Leave a Comment

First Time Homebuyer Minimum Credit ScoresFor the past couple of years, when we talked to a borrower with a credit score of 580 to 600 – we told them they had a 3 to 4 month waiting period before they could buy a house.  In MOST cases, that was all the time we needed to help someone who was motivated, and who could really afford a home, to get their scores in order.

Minimum credit scores for the NC Housing First Time Homebuyer program was 600, and we could help people get into houses if they qualified for the program and had the scores.

On May 1, 2013 that changed.  It changed from a couple of perspectives… first the NC Housing program changed SIGNIFICANTLY. The changes include higher credit scores, more flexibility for homeownership status, and a better downpayment / closing costs assistance program.

Additionally, changes were made in April to the Automated Underwriting Systems for Fannie and Freddie – with those updates, Credit Score requirements for Governement loans went up to 640.  Can Underwriters override the “Automated” Approval systems?  Yes.  But Will They???  That takes a VERY well documented case. [Read more...]

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How Much Does Bad Credit Cost You?

April 19, 2013 by 4 Comments

bad credit

We saw this recently and thought it was an accurate depiction of the fact that scores under 720 hurt you in the pocketbook these days!

To create your mortgage credit score, the credit scoring system analyzes various elements of your current credit situation, including your debts, payment history, and credit types.

secured credit-cards can helpIt’s important to understand that payment history accounts for only 35% of your overall score, so it takes more than paying your bills on time to increase your score. In today’s market, a score of 620 or below would be cause for concern, because even a small difference in your credit score can cost you big.

In fact, Fannie Mae announced earlier this year that any loan in which the borrower’s FICO score falls below 680 will incur either higher interest rates or fees charged at the time of closing of up to 2.00%. For example, on a conventional loan amount of $300,000, a borrower with a FICO score of 680 or lower, would be required to pay $4,000 or experience a higher interest rate. This means clean up your credit now or pay a higher price later.

For more information on your credit score, contact Steve and Eleanor Thorne, Mortgage Bankers in Cary , 919-649-5058. Connect with us on Facebook!

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4 Things U Can Do NOW!

April 18, 2013 by 12 Comments

cary mortgagesIs your credit picture lookin’ kinda bleak??

Relax – if we work together for the next 6 months – we can get you in a much better position!

No matter what your credit picture – 6 months of work will general improve your scores by 100 to 150 points.  Here are 4 things to do from the start:

  • Stop using your credit cards. You might need to take PB&J sandwiches to work everyday – you might not get new shoes for Easter – but you’ve got to break the habit of spending credit, and work on a cash basis for all purchases.  If you are an impulse spender, like me, there’s an easy trick.  Take your credit cards and put them in a plastic container.  Fill the container up with water.  Put it in the FREEZER.  Now – if you melt the ice in the microwave it’s going to mess up your little strip on the back… but if you NEED your credit cards for new tires (for instance) you can wait the two or three hours for them to thaw.  If you WANT a new dress for a date – you will be more likely to call a girlfriend an BORROW something! [Read more...]
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Credit Card Balance = Lower Score?

December 13, 2012 by 1 Comment

rent-vs-buy

If you have 3 Credit Cards – and one of them is “Max’d Out” and One has a zero balance, and one you pay off monthly… you could be pulling your score down! Look at the following example:

Credit Card Balance versus Available  Credit

Visa with $10,000 balance and no Available Credit

Discover with $300 Balance you pay off monthly

MasterCard with $0 Balance

That Visa Card with no Available Credit = Lower Credit Score
•

The smarter move is to spread the balance between Cards ($5,000 each).  This makes it look like to the COMPUTER SYSTEM that checks all of this – that you are NOT max’d out!  This will = Higher Credit Score! [Read more...]

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Can I Get A Mortgage With A 600 Credit Score in NC?

November 16, 2012 by 2 Comments

http://listings.realbird.com/Real_Estate/In-Ground-Pool-to-Enjoy-/Cary/NC/C9I7L9R4/187635.aspx?tab=photosWe talk to people everyday who want to know if they can get a mortgage, a home loan, with a 600 credit score in NC – the answer is POSSIBLY!  In North Carolina we have a program backed by the State, that allows people who meet the minimum household income for their county, and who are purchasing a home that is under the maximum sales price to buy a home if at least 2 of their 3 credit scores are a minimum of 600.

The NC First Time Homebuyer Program is not just for first time homebuyers!?  That’s right! The program is for ANYONE who has not owned a personal residence for the last three years - there are some unique caveats, so if you think you might qualify for the program, call us at 919 649 5058

Here are some of the most Frequently Asked Questions:

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Time and Credit

October 27, 2012 by 3 Comments

FICOWhen you are trying to increase your credit score – TIME is a big factor.

How long has it been since you missed a payment.  For Car Loans and Mortgage Loans – that number MUST be 12.  Meaning you have NO LATE PAYMENTS in the last 12 months.

Right now this is the most important part of increasing your credit score.  Every month past that 12 month period helps get your score higher… [Read more...]

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How to Improve Credit Scores and Buy a House in NC

October 20, 2012 by

cary_homes_for_salePotential Homebuyers ask us everyday, “How can I improve my credit score???”  There’s not a simple answer, because every credit history (and score attached to that history) is like a snowflake. In general, you will need a credit score of at least 620 for a FHA loan, and 640 for a VA Loan or a USDA Home Loan.  Conventional Loans usually require a minimum credit score of 660 – but credit scores over 720 will get the best pricing (today’s best mortgage rates).

If you are close to these numbers, or if you qualify for a NCHFA program, (which allows two scores to be over 600), you are probably CLOSE to being able to buy a house in North Carolina!  We want to help!

There are some concepts that are important to understand about Credit Scores and improving your credit score – no matter what loan program you are applying for: [Read more...]

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The Credit Cards You Don’t Want To Close

October 15, 2012 by Leave a Comment

Sometimes I think I’m writing an advice column… Credit is an important part of getting a house, and many people are ready to take control of their credit picture, make some changes, and buy… the problem is that there’s so much DIFFERING advice about what you should do to ACTUALLY improve your credit scores.

If you are looking at your credit report and you think there are some credit accounts that need to be closed, here’s our advice:

Don’t Close Accounts that have a balance. When you close a credit card that has a balance, your total available credit is lowered to $0.  Since you closed an account with no available credit, it looks like you are maxed out – and you just lowered your score! [Read more...]

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7 Things That Can Hurt Your Credit Score

October 7, 2012 by Leave a Comment

What's Your Home In Cary NC Worth?Depending on where you are in your life, you might be ready to improve your credit scores.  Many people in America are realizing that great scores are made over time – just like healthy living, it’s the “conscience” decisions we make that are so very important. We see 7 things everyone should be aware of when trying to figure out what will help create a better credit Score.

“Success on any major scale requires you to accept responsibility . . . . In the final analysis, the one quality that all successful people have is the ability to take on responsibility.” [Read more...]

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Good Credit Advice

July 11, 2012 by 2 Comments

good credit adviceFirst off… let’s discuss what Secured Credit is.

A Secured Card requires you to make a deposit in order to obtain the credit card.  If you are doing this – you are either a parent with a young child that needs a credit card – or you are re-building.

Because there are other ways to obtain cash for a child- let’s assume you fall into the “other” category.

If you’ve gotten into financial difficulty, and you’ve damaged your credit, a secured credit card can help you build your scores back up because they report your payment history to the credit bureaus… and we all know that payment history makes up the largest portion of your score.

Remember that when you get a Secured Credit Card – you are not having your credit pulled, so it will not pull your credit scores down!

A secured credit card operates just like a regular credit card.  As I said, the major difference is that you, the cardholder, are  making a deposit as security in case you default on the credit card payments. [Read more...]

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