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THE CREDIT SCORE
We all realize how important our credit scores are especially when it comes to purchasing a new home. Your credit will determine what mortgage program you are eligible for, your interest rate, if you are eligible for down payment help, of course mortgage approval. ans so much more.
Did you know that Conventional Mortgage Programs use what is referred to as loan level pricing with mortgage lenders, what Fannie Mae and Freddie Mac is trying to do is manage risk by carving up the credit score scale into 20-point increments and adjusts the rates it offers borrowers each time a credit score moves up or down by about 20 points. For instance, if your score drops to 740 from 760, BTW 760 is the top of the scale, you’re likely to see a small bump up in the rate you’ll be offered. If you have a score of 760 or above, you’re pretty much golden, from there down, every 20 points you’ll start seeing small hits here and there.
If you are wondering Conventional Mortgage Programs do the same with down payment, the more down payment you put on a home purchase the better the interest rate. If you put down 30% or more the risk adjustments to the mortgage interest rate is removed. If you have a down payment less than 30 percent the risk adjustments get growing higher as you put down less.
If you have lower credit scores AND a low down payment that the risk adjustments can be very high, which is why a 5% down payment with a 660 credit score is not getting the interest rate that is advertised. There are a few exception to loan level pricing, but those are special conventional mortgage programs.
Many lenders will do the same risk adjustments for the governmental loan programs like FHA, VA, and USDA, though Ginnie Mae does not have loan level pricing adjustments.
INCREASING YOUR CREDIT SCORES HAS MANY BENEFITS
Now that you know about risk based pricing of interest rates and how it affects the interest rate you will get from a mortgage lender you understand that the credit score you had when you were approved is affecting how much you house payment will be for the life of your home loan!
What if you want to utilize down payment assistance to help you purchase your next new home? Most DPA programs have a minimum required down payment.
Both Conventional mortgage programs have a minimum down payment. FHA guidelines state that their minimum down payment is 500, good luck with any score below 580 plus if your score is below 580 the minimum down payment goes from 3.5% to 10%!!!!!
What if you are a 660 credit score, with 10% down payment wanting to go with a conventional mortgage and don't want to have monthly mortgage insurance? You would need at least a 680 credit score to make this scenario work for you.
The benefit to having a higher credit score touches nearly every mortgage borrower, so what can be done to capture the benefit of a higher credit score?
THE CREDIT SCORE RESCUE PROGRAM
The Credit Score Rescue Program is best utilize for near miss situations, you have low scores but not poor or bad credit scores and you need to qualify for a mortgage program or down payment assistance.
You have decent to good credit scores and you want to move yourself into a higher risk adjustment bucket or two to get better mortgage scenarios. You are looking for longer term benefits than just getting approved for the mortgage available at the time.
The Credit Score Rescue Program will not help with the credit scores that come from mismanagement of your credit, really low scores, sub-560 credit scores are more than likely needing credit restoration and repair professional programs
HOW DOES IT WORK?
When you apply for a mortgage, apply for mortgage pre-approval, or apply for mortgage pre-qualification you will provide me with permission to pull a credit report for you. I need to have a mortgage credit report and not a consumer credit report that we all have access to. The mortgage credit report uses a completely different scoring model and many times produces far different credit scores than what you are seeing in a consumer credit report.
The Credit Score Rescue Program is provided to you as a value added service of being a mortgage applicant and having applied for a mortgage, pre-approval, or pre-qualification.
Normally, when a mortgage lender orders a credit report for a borrower they receive back the credit history, credit scores, and other information like credit inquiries, bankruptcies, and judgments.
When I order a credit report for you I ask for a SPECIAL ADD-ON of your potential credit scores. Your potential credit scores is provided by the three credit bureaus and is a determination by each bureau as to what your credit scores can be if you take specific action steps.
I also have access to a 'what if simulator' that allows me to determine what your credit scores can be if other action steps are taken. These other actions steps could include being added to another credit card, what level to pay down a credit score for the biggest bank for the money or what score we get if we only pay down a small amount. Another action step to use in the simulator is what would happen if you started a new credit card or two and at what usage level that card or cards need to be to best serve you. (I can refer you to credit cards that will approve you instantly and report to the bureaus within a couple weeks)
The potential credit scores are based on action steps that would be taken immediately or as quickly as possible that would produce credit score increases within a 30 to 45 day period. There have been many instances that I have seen higher scores within 30 days.
If the potential scores are beneficial to what you are wanting to accomplish or gain then I would order the Action Step Plan, a detailed report from each bureau, or the bureau we are wanting to increase, that details exactly what needs to be done to get you the desired scores or more.
My experience has been that when the actions steps are executed as quickly as possible, within 30 days of the credit report date, and are executed as detailed that the results are at worst exactly what we were told. Most times I have seen greater increases in credit scores.
Are you wanting to use the Credit Score Rescue Program? Would you like to have a conversation and ask questions? Use the form below, provide answers to a few questions, and I will send you and email to schedule a time we can talk. This will help me know a little more about you and keep me from taking up more of your time and not ask the same questions when we talk.
After we have that initial conversation and you filled out the form below and you want to continue moving forward I will ask that you fill a mortgage application. If you want to fill out that application now
to be taken to a secure area in this website and fill out the full mortgage application. Then we will schedule a time to go over everything.
As always if you want to contact me directly I would welcome the opportunity!
Hi, I am Bob Rutledge with New American Funding a progressive and customer oriented Mortgage Company. I have been a Mortgage Loan Officer for over 2 Decades, I have closed 1000s of mortgages, I have experience as a Mortgage Underwriter too. I specialize in First Time Home Buyer Programs, Renovation and Construction Mortgages, and knowing the best mortgage options, programs and guidelines to provide the best to my clients. I concentrate on making more options available to home buyers! When we work together you will find that I answer all questions, sometimes before they are asked. I prefer to be available to you as much as my family and life will allow, I am accessible to you via my cell, text, or email, or you can come and visit at my office. You will never wonder if I left you.