Back in the Saddle

Well after my heart surgery and month long recovery I am feeling like my old self again.My intention is to once again attempt to write my blog with timely real estate and mortgage information for you to indulge and hopefully start lively conversations. My perspective is derived from my over 30 years of real estate and credit, lending experience. I will be back soon!

Credit Issues

Well I m back after a brief illness! The topic of credit issue  scores always sparks much talk. The thing to remember that a  credit score is like a snapshot (xray if you will) depicting how you manage your debts. The numbers and historical data of payments and balances give the credit grantor information necessary to conform to repayment models and thus determine terms of the mortgage.

Terms include rate, down payment, etc.  Of course the income of the borrower plays a big role in the determination of the repayment ability.Think of the credit component as proven likelihood the loan will be repaid in the lender’s decision.

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Did you know that your credit score is composed by various computer models used by different reporting that collect information about your paying habits broken down as follows:

Payment History: 35%

Amounts Owed: 30%

Length of Credit History: 15%

Types of Credit: 15%

New Lines of Credit:10%

Obviously the on time payments and limiting your balances have the most impact on your overall composite score.

More to come on this topic.

Market Up Date

The cliché rolls on “Interest Rates are at all time record lows and Home Prices are still at very affordable levels. So why are Home Sales only slightly improved (although the trend is up) from the December of 08 levels.
One answer can be found in the  residential finance industry.  The underwriting criterion for  loan applications is now very rigid as opposed to 10 years prior. The three most important tests now looked for by underwriting are credit history, debt to income ratio, cash to close, including any down payment requirement. Other factors as income, job history, and reserves also play important part of the decision. Keep in mind that the automated underwriting system “screens” potential applications before a human underwriter ever sees your file. The “AU” is based upon FNMA , FHA, VA and other government backed programs’ input to the computer model used for AU underwriting.

The above is just a very cursory outline of the process; however, you can understand the rigid aspect of obtaining a home loan today’s market.

I’ ll have more to contribute to this topic; and by the way, the information is intended to just to let you know it ‘s not all negative, you just need to have a road map for the “process” in order to avoid any frustration and delays obtaining “clear to close” news from your mortgage professional.