"I'm a 27 year old single mom of 2. I recently closed on my house at the end of August. I had a really wonderful experience with Stuart, Jen & Bob. They were there for me every step of the way. I needed about a dozen preapproval letter, and never had an issue getting one.
I've been under contract for three houses so I had to do three loan applications. The first house fell through due to repair issues. The second was a short sale. I was under contract for two months before that fell through. Luckily I found another home which is the one I'm now a proud owner of. Jen & Stuart were there every step of the way. They helped me get involved in housing counseling classes so I can have a better understanding of the commitment I was entering. They also helped me get the various grants to lessen the closing costs. Overall the experience of buying a home is overwhelming, but I had a very awesome team. I really appreciate all the hard work that went into making my dream of buying a home come true."
- Latosha
Our customers save money and close their loans quickly because we employ the most advanced mortgage technology available.
Wednesday, September 18, 2013
Friday, September 6, 2013
Credit Score Limbo: How Low Can You Go When Buying a Home?
Applying for a home loan with a low credit score can feel like playing a game of limbo. Having a mortgage application denied can feel like being in limbo.
Borrowers that do not initially qualify for a mortgage due to their credit score can shorten the time they are in credit-rebuilding-limbo with a few simple steps. Although, it might be helpful to first understand how credit scores are used when buying a home.
Lenders pull a tri-merge credit report from all three bureaus for each potential borrower. All lenders use the middle score, which for many lenders needs to be no less than 640 in order to qualify a borrower for a mortgage.
If the applicant’s score does not meet the cut off, the lender will then try to determine the cause of the low credit score. Collections and judgments are common causes of low credit scores, and must be paid before the mortgage application can be approved.
Medical collections are different. Medical debt that collectively adds up to less than $1,000 does not have to be paid off in order to be approved for a mortgage, so long as that debt does not affect the credit score. Lenders will vary on this rule. You should ask your lender about medical collections before you do anything with them.
Some creditors will take longer to update paid debts than they do to turn over the debt to collections in the first place. In this instance, the lender can use written proof that the debt has been paid. The document must show all the account information, borrower name, and company letterhead. For the revolving debt, or credit card accounts, the credit bureaus like to see you utilize your revolving credit, but not too much. It is suggested that the balance remain under 40% of the credit limit to ensure the outstanding debt can be handled and paid timely. As always, if you remit more than the minimum payment, it is looked upon in a positive manner to show the bureaus continue credit worthiness.
Completing this step is sometimes all it takes to increase a borrower’s credit score that fell just below the cut off. If a borrower’s credit score is too far below 640, than they may be in credit-rebuilding-limbo for a while. There are still additional ways to speed up the process.
Potential borrowers can gather up documents that show they have been regularly paying their debts, and overnight them with return receipt requests to each of the credit bureaus. The credit bureaus will then research and update the borrower’s credit score. This usually occurs within a few months.
Lastly, borrowers may not have to pay off all of their debt in order to qualify for a mortgage. There is a calculation system, available to some most lenders, which allows them to see how credit scores would be affected if the borrower paid off a percentage or the balance of their debt. Although it is not a certainty, it typically helps borrowers know where they need to be in order to take out a mortgage.
As the potential borrower pays off their debt and gathers documentation, it is always good to stay in contact with the mortgage loan officer and/or the person that is assisting you in repairing your credit.
If you have any additional questions about how credit scores affect the home buying process, please call Stuart directly at 410.491.0200 or email at septstein@baybankmd.com.
Borrowers that do not initially qualify for a mortgage due to their credit score can shorten the time they are in credit-rebuilding-limbo with a few simple steps. Although, it might be helpful to first understand how credit scores are used when buying a home.
Lenders pull a tri-merge credit report from all three bureaus for each potential borrower. All lenders use the middle score, which for many lenders needs to be no less than 640 in order to qualify a borrower for a mortgage.
If the applicant’s score does not meet the cut off, the lender will then try to determine the cause of the low credit score. Collections and judgments are common causes of low credit scores, and must be paid before the mortgage application can be approved.
Medical collections are different. Medical debt that collectively adds up to less than $1,000 does not have to be paid off in order to be approved for a mortgage, so long as that debt does not affect the credit score. Lenders will vary on this rule. You should ask your lender about medical collections before you do anything with them.
Some creditors will take longer to update paid debts than they do to turn over the debt to collections in the first place. In this instance, the lender can use written proof that the debt has been paid. The document must show all the account information, borrower name, and company letterhead. For the revolving debt, or credit card accounts, the credit bureaus like to see you utilize your revolving credit, but not too much. It is suggested that the balance remain under 40% of the credit limit to ensure the outstanding debt can be handled and paid timely. As always, if you remit more than the minimum payment, it is looked upon in a positive manner to show the bureaus continue credit worthiness.
Completing this step is sometimes all it takes to increase a borrower’s credit score that fell just below the cut off. If a borrower’s credit score is too far below 640, than they may be in credit-rebuilding-limbo for a while. There are still additional ways to speed up the process.
Potential borrowers can gather up documents that show they have been regularly paying their debts, and overnight them with return receipt requests to each of the credit bureaus. The credit bureaus will then research and update the borrower’s credit score. This usually occurs within a few months.
Lastly, borrowers may not have to pay off all of their debt in order to qualify for a mortgage. There is a calculation system, available to some most lenders, which allows them to see how credit scores would be affected if the borrower paid off a percentage or the balance of their debt. Although it is not a certainty, it typically helps borrowers know where they need to be in order to take out a mortgage.
As the potential borrower pays off their debt and gathers documentation, it is always good to stay in contact with the mortgage loan officer and/or the person that is assisting you in repairing your credit.
If you have any additional questions about how credit scores affect the home buying process, please call Stuart directly at 410.491.0200 or email at septstein@baybankmd.com.
Tuesday, September 3, 2013
Federal Home Loan Bank of Atlanta (FHLB) Is Back!
We have been given a rare opportunity to access the remaining funds for 2013; effective August 26, 2013!
The First-time Homebuyer Program (FHP) provides matching funds for down-payment and closing-cost assistance to low- and moderate-income homebuyers. Federal Home Loan Bank of Atlanta partners with member financial institutions to make awards of up to $5,000 per household. The money is distributed to eligible homebuyers on a first-come, first-served basis.
Check with us on 2013 Income limits to see if you/your buyer is eligible today!
Let Us Work for You!
Please call Stuart directly at 410.491.0200 or sepstein@baybankmd.com.
The First-time Homebuyer Program (FHP) provides matching funds for down-payment and closing-cost assistance to low- and moderate-income homebuyers. Federal Home Loan Bank of Atlanta partners with member financial institutions to make awards of up to $5,000 per household. The money is distributed to eligible homebuyers on a first-come, first-served basis.
Check with us on 2013 Income limits to see if you/your buyer is eligible today!
Let Us Work for You!
Please call Stuart directly at 410.491.0200 or sepstein@baybankmd.com.
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