Applying for Mortgage?
|Posted by Manila Mail under Smart Buy|
What do I need to apply for a mortgage?
How important is my credit score? Lenders still has a stricter guidelines in extending mortgage loan to borrowers. Based on your credit score FHA can go down as 580 FICO score with a 3.5% down payment. If your score is from 540 to 579 the lender will still consider it on case to case basis but will requires at least 10% down payment. What can I do if my credit score is low and wants to improve it? If you have a low credit score and you really want to purchase a home you may want to contact some professionals who will go over with you item by item on your credit report. They will advise you what you need to do in the next six months to one year and then get your credit re-score. If you are just shy of the required score by few points they can maybe tell you some immediate action you can do and then they can order re-score right away. This means for example you have 570 score and you need only ten more points to be at 580 as required.
What is a FICO score? FICO is a mathematical equation/calculation lenders use to evaluate the risk associated with lending you money. FICO stands for Fair Isaac Company, the company that originally created the formula.
What could affect my credit score? There are many things that can affect your FICO score, missing monthly payments on your credit cards and other obligations thus rendering you past due, having big balances on your credit and the worst is having a collection item, to just name few. It is just wise to run your credit report at least once a year so you can see exactly what is on your report. There are instances that the fault will be on the credit company like misposting something that is not yours.
What is a median score? The lender will pull your credit upon giving them authorization to do so. They based your report through the three major companies that gives your score. These are Equifax Credit Information Services, Experian National Consumer Assistance Center and Transunion Consumer Solutions. The lender will get your median score among the three scores.
Good news, congress passed a proposal to extend Home Buyers Tax Credit closing deadline. The house of representatives introduced this proposal to extend the original June 30 closing deadline for home buyers who want to avail of the $8,000.00 in tax credit. The Home Buyers Assistance Act of 2010 would extend the deadline to midnight of September 30, 2010 on contracts that were signed and ratified by the midnight April 30, 2010 deadline (As per RISMEDIA July 1, 2010).
(Note: Rey Canlas is a licensed real estate in Virginia. He is a member of the Multi-Million Sales Club for NVAR. He is also a CPA in Manila, Philippines. He is under Westgate Realty Group in Falls Church which is an expert in