|
|
|
Take Advantage of Loan Pre-Qualification
|
|
The Advantages |
| √ |
Know how much house you can afford. |
| √ |
Know how much cash you will need for the down payment. |
| √ |
Simplifies pre-approval. | | |
A number of factors determine the price range of homes you'll want to preview - one of these factors is loan pre-qualification. Without this knowledge, we could possibly find a home that meets or exceeds your needs only to later find out it doesn't fit within your budget. You will need to consider the payment you feel comfortable making and many other factors known only to you and your family.
As your Realtor, I will help you pre-qualify by discussing your general situation. If you are unfamiliar with how this works, I will help you understand the process. Items considered when pre-qualifying for a mortgage loan include:
-
Employment History- This includes the number of years you have worked in your field, not necessarily the exact amount of time at your current employer.
-
Credit History and Scores- Your lender will go over these with you, please scroll down this page for a more information on FICO scores.
-
Monthly Income and Expenses- Income can be from any source. Only expenses such as car loans, credit lines/cards and mortgages count as your "expenses". The amount of income divided by certain expenses will ascertain your ability to qualify for a new mortgage.
With my knowledge of the local mortgage market, I'll help you make an informed decision as to the type of loan you'll want and I will get you in touch with local mortgage professionals who understand which loan product would work best for your indidual situation. There are many different types of loans to consider - FHA, VA, Cal Vet, Conventional and certain other newer types of loans. There are even special loan programs for military, medical, law enforcement and state workers. The city of Vacaville has an affordable housing program for first time homebuyers too. Together, we'll find the best loan for your situation.
Call me today to get connected to a local mortgage consultant if you do not desire to consult with your bank. |
Scoring your Credit - How's your FICO?
In today's increasingly automated society, it should come as no surprise that when you apply for a mortgage, your ability to pay can be reduced to a single number. All the years you've been paying your mortgage, car payments, and credit card bills can be analyzed, sliced, diced, spindled and mutilated into a single indicator of whether you're likely to meet your future obligations.
All three of the major credit reporting agencies (Equifax, Experian and TransUnion) use a slightly different system to arrive at a score. The best known is called the FICO score, based on a model developed by Fair Isaac and Company (hence the name) and used by Experian. Equifax's model is called BEACON, while TransUnion uses EMPIRICA. While each of the models considers a range of data available in your credit report, the primary factors are:
- Credit History - How long have you had credit?
- Payment History - Do you pay your bills on time?
- Credit Card Balances - How much do you owe on how many accounts?
- Credit Inquiries - How many times have you had your credit checked?
|
Each of these, and other items, are assigned a value and a weight. The results are added up and distilled into a single number. FICO scores range from 300 to 800, with higher being better. Typical home buyers likely find their scores falling between 600 and 800.
FICO scores are used for more than just determining whether or not you qualify for a mortgage. Higher scores indicate you are a better credit risk, and thus may qualify for a better mortgage rate.
What can you do about your FICO score? Unfortunately, not much. Since the score is based on a lifetime of credit history, it is difficult to make a significant change in the number with quick fixes. The most important thing is to know your FICO score and to ensure that your credit history is correct. Conveniently, Fair Isaac has created a web site (www.myFICO.com) that let's you do just that without affecting your score itself, this inquiry is generated by you. For a reasonable fee, you can quickly get your FICO score from all three reporting agencies, along with your credit report. Also available is some very helpful information and tools that help you analyze what actions might have the greatest impact on your FICO score. Each of the credit services offers similar services on their web sites: www.equifax.com, www.experian.com, and www.transunion.com. You may also want to get your free annual credit report at Freecreditreport.com
Armed with this information, you will be a more informed consumer and better positioned to obtain the most favorable mortgage available to you.
Additionally, if you choose to pay off loans or car debts, you will see your score affected in enormous ways. Making sure you pay any bills on time, including your rent is so important in today's scoring systems. Paying a bill before it is due, and never allowing any of your payments to be late will increase your score too. Many companies give you little grace time before they elect to put a note in to the credit scoring companies and usually there is little you can do about it once the payment is late, (yes, even a $15 JC Penney payment), that mark can be applied against your score for more than seven years! Newspaper bills, medical bills even if paid by your insurance can affect this. When buying a new car, if you apply to more than one car dealer for a credit check you can acquire what is termed "excessive inquiries" these will also count against you. If you say yes when the department store clerk asks if you'd be interested in some "instant credit" you will also get another mark. These marks all add up to trouble when trying to qualify to buy a home.
|
|
Listings may not be those of this Realtor or Broker, and may be offered via IDX database sharing via the Bareis mls. Size, dimensions, condition of property, features, amenities, availability listed here must be verified or measured for satisfaction of potential buyer.