Why are credit score and mortgage testimonial calculated the method they are?
My wife and I are trying to buy our first home and the mortgage brokers we've talked to have not be able to provide satisfactory answers for the following question:
- How is it that our credit scores are below average? We consistently pay our bills in good time and have low debt. Is the average American really doing better than us?
- Why don't mortgage approval departments give more freight to rent payment history? We're unable to qualify for a home near total payments (PITI) roughly equal to our current rent payment, which we have remunerated on time for the past three years. Our credit score are low due to a couple of small (<$100) collection items on accounts we thought were in upright standing, which we promptly paid when notified. Why do these outweigh the seemingly more relevant rent history?
- Why do mortgage bank try to minimize foreclosures? Since they retain ownership after a foreclosure, how do foreclosures hurt their bottom line?
Answers:
You have some particularly valid questions, that to me any mortgage broker should be able to answer for you.. If they cant, THEY MUST NOT BE LICENSED!! a licensed mortgage loan officer would enjoy to answer questions similar to therse in charge to pass state licensing test!!
I will help you answer these questions...
1. Paying bills prompt and having low debt are definitly good things for your credit.. When have collections though, it hurts you because it tells a lender that you didn't pay a debt you owed, and 'that' lender have to file a dispute to reclaim what was owed.. Unfortunately even if you promptly settle up it back, the damage have already been done to your credit being that they have to file a dispute against you...
The best i can suggest is dont get anymore collections (which you distinctly realize)
2. As for rental payment history, unfortunately this is something that isn't even reported on your credit report..(unless you become delinquent and dont settle rent) The reason is because you are not borrowing any money at an interest rate... To gain or report credit on something you have to repay interest or be borrowing money of some kind.. I know it dosen't seem right, but unluckily it is just the way lenders and credit bureau's are...
3. and finally, as for foreclosures.. These are minimized by adjectives lenders for one simple reason..When a bank forecloses on a home, they 9 out of 10 times catch UNDER 70% return on the value of the home.. Most of the time, they dont even get plenty back from the sale of the house next what the borrower owes!
On top of that they have to pay attorneys to wallet disputes, they have to pay a processing department to do the processing, and they essentially spend a lot of time and money for nothing..
Banks aren't surrounded by the business of selling houses... THEY ARE IN THE BUSINESS OF LENDING MONEY TO PEOPLE THAT WILL CONTINIOUSLY PAY PAYMENTS AND INTEREST ON TIME EVERY MONTH!!
So obviously if they lose money, they want to minimize foreclosures as much as possible!!
It sounds to me you are working with an inadequete mortgage company..
My autograph is Jason Fry, i am a licensed loan officer for Providential Bancorp (nationwide lender).. I work with a portfolio of investors that work with relatives from 500 credit scores and bankruptcy's, to people next to 800 credit scores, and thousnads in reserves.
I would be happy to assist you in purchasing a home, and at LEAST know how to efficently answer any question you have almost the mortgage industry..
Feel free to call or email me at any time...
312-264-6448, or jasonf(a)providential.com
I wish you the best!
Jason Fry
Senior Mortgage Specialist
Providential Bancorp
312-264-6448 Source(s): www.providential.com
www.bbb.com keyword Providential
(better business bureau biggest site)
You are right and there is a more fair system to be exact being developed and will come out next year. Many lenders present much less weight to medical bills contained by collections because everyone has them.
If your credit score is 500 or better you can find financed though its a slightly lengthier process. i do not lend for a living but I will help you receive financing if you want to email me.
When trying to purchase a foreclosure banks will typically come down a certain percentage each month the home is on the bazaar. Most of the time you will need a "rehab" loan because most of them need conservation.
Related Questions:
Credit counseling and wanting to getting a mortgage?
My husband and I just began credit counseling this month contained by order to get our credit card debt from when we be in college under control back our credit was totally ruined. Anyways, now it looks resembling by husband is going to get a decent...
- How is it that our credit scores are below average? We consistently pay our bills in good time and have low debt. Is the average American really doing better than us?
- Why don't mortgage approval departments give more freight to rent payment history? We're unable to qualify for a home near total payments (PITI) roughly equal to our current rent payment, which we have remunerated on time for the past three years. Our credit score are low due to a couple of small (<$100) collection items on accounts we thought were in upright standing, which we promptly paid when notified. Why do these outweigh the seemingly more relevant rent history?
- Why do mortgage bank try to minimize foreclosures? Since they retain ownership after a foreclosure, how do foreclosures hurt their bottom line?
Answers:
You have some particularly valid questions, that to me any mortgage broker should be able to answer for you.. If they cant, THEY MUST NOT BE LICENSED!! a licensed mortgage loan officer would enjoy to answer questions similar to therse in charge to pass state licensing test!!
I will help you answer these questions...
1. Paying bills prompt and having low debt are definitly good things for your credit.. When have collections though, it hurts you because it tells a lender that you didn't pay a debt you owed, and 'that' lender have to file a dispute to reclaim what was owed.. Unfortunately even if you promptly settle up it back, the damage have already been done to your credit being that they have to file a dispute against you...
The best i can suggest is dont get anymore collections (which you distinctly realize)
2. As for rental payment history, unfortunately this is something that isn't even reported on your credit report..(unless you become delinquent and dont settle rent) The reason is because you are not borrowing any money at an interest rate... To gain or report credit on something you have to repay interest or be borrowing money of some kind.. I know it dosen't seem right, but unluckily it is just the way lenders and credit bureau's are...
3. and finally, as for foreclosures.. These are minimized by adjectives lenders for one simple reason..When a bank forecloses on a home, they 9 out of 10 times catch UNDER 70% return on the value of the home.. Most of the time, they dont even get plenty back from the sale of the house next what the borrower owes!
On top of that they have to pay attorneys to wallet disputes, they have to pay a processing department to do the processing, and they essentially spend a lot of time and money for nothing..
Banks aren't surrounded by the business of selling houses... THEY ARE IN THE BUSINESS OF LENDING MONEY TO PEOPLE THAT WILL CONTINIOUSLY PAY PAYMENTS AND INTEREST ON TIME EVERY MONTH!!
So obviously if they lose money, they want to minimize foreclosures as much as possible!!
It sounds to me you are working with an inadequete mortgage company..
My autograph is Jason Fry, i am a licensed loan officer for Providential Bancorp (nationwide lender).. I work with a portfolio of investors that work with relatives from 500 credit scores and bankruptcy's, to people next to 800 credit scores, and thousnads in reserves.
I would be happy to assist you in purchasing a home, and at LEAST know how to efficently answer any question you have almost the mortgage industry..
Feel free to call or email me at any time...
312-264-6448, or jasonf(a)providential.com
I wish you the best!
Jason Fry
Senior Mortgage Specialist
Providential Bancorp
312-264-6448 Source(s): www.providential.com
www.bbb.com keyword Providential
(better business bureau biggest site)
You are right and there is a more fair system to be exact being developed and will come out next year. Many lenders present much less weight to medical bills contained by collections because everyone has them.
If your credit score is 500 or better you can find financed though its a slightly lengthier process. i do not lend for a living but I will help you receive financing if you want to email me.
When trying to purchase a foreclosure banks will typically come down a certain percentage each month the home is on the bazaar. Most of the time you will need a "rehab" loan because most of them need conservation.
Related Questions:
Credit counseling and wanting to getting a mortgage?
My husband and I just began credit counseling this month contained by order to get our credit card debt from when we be in college under control back our credit was totally ruined. Anyways, now it looks resembling by husband is going to get a decent...