What Do Lenders Look For On Credit Reports?
The credit report and score are arguably the most important pieces of the pre-qualification puzzle. The sooner we review this together, the better chance we have at strengthening your home buying position when that time comes for you.
Here are some of the many pieces of your report that we dive into:
A study by the National Association of State Public Interest Research Group discovered that 79% of all credit reports have at least one error. I want to do everything possible to make sure none of my clients are penalized for something that is inaccurate. To help avoid that, we may need time to rectify errors.
Quick Tips and Suggestions
There may be some quick and easy changes to improve your score. The sooner we look for these opportunities for improvement, the better purchasing position you will be in.
We look for any collections, judgments, foreclosures, short sales, etc... as those may impact what programs you qualify for. We'll check for seasoning requirements based on how exactly those are displaying on your report.
To determine how expensive of a home you qualify for, we utilize your debt-to-income ratio.
If you want to increase how much you qualify for, we will help you prioritize which debts to decrease for us to get the most bang-for-your-buck in increasing your purchasing power.
To piggyback off point 3, even if you know you do not have any derogatory accounts, we certainly don't expect you to know all of the mortgage rules! Sometimes there are items that show up on your credit report that are fine to have, but may still limit what programs you can use. For example, if you have a timeshare, that may eliminate you from certain down payment assistance programs. If you have disputed accounts, that too can impact eligible loan products.
To issue you a Pre-qualification, we run your information through what is called an Automated Underwriting System. This cannot be done without your report. Getting a mortgage approved involves layers of scrutiny in which this underwriting system can pick up on. All of this we do free for you, to make sure you are only looking at properties where getting a mortgage based on your financials will not be an issue.
Ready to get started? Contact me today! Or, get pre-qualified here: mainstreethomeloans.com/hcochin