Credit tune up, that is.
And, how long before home shopping do you wait to apply for a loan.
A big mistake made by a lot of buyers is to not get a pre-approval LONG before they start looking for a home.
Now, not all programs are score driven, but scores do count in a lot of programs. And a good mortgage lender can coach a borrower into a few extra points if given the time.
Example: Borrower just maxed out a credit card buying widgets. If the borrower can spread that around to several cards, the score may improve a little. Borrower may have a home equity loan maxed out doing repairs to the home they are selling. If they can 'up' the credit line, that revolving line of credit will not look maxed out. And the credit scores will CERTAINLY increase. The borrower may also decide to pay off a bunch of debt so they look better to the loan application.... effectively wiping out all of their reserves. Not a good idea in most cases.
And what about the guy who thought that insurance paid all of his doctor bills? To find that some collection agencies just reported him past due on several accounts.... tanking his score? Again.... things we can deal with.
I am a firm believer in prequalifying a borrower LONG before they inten to look at homes. That way, if there needs to be a little tweaking..... we have time to deal with it before we do the loan. Maybe saving the borrower thousands of dollars over the life of the loan.
Realtors: Do yourself a favor.... convince the client to get preapproved right away. Even if they arent going to buy for 3+ months. Give the lender time to improve the clients position. And YOU will be a HERO in that clients mind.
"Less than savory".....
BWAHAHA..... just spiut coffee on my monitor
Ardell,
the answer is a long story. and every situation is unique.
a good loan officer will know 'going in' whether a point increase will equate to a better rate or not.
there are so many variables, that i couldnt explain it all here....
but a little example:
615 to 620 will matter a LOT on a community accomodation program thru bank of america.
but that same increase will fare a .1% (1/10th of one percent) better rate with another program
1) as to being un-feng shui...just stick a glass bowl in the furthermost rear left corner of your home and office. Give it a shot...what do you have to lose?
2) Any advice for people with credit problems from a health club they signed up for for 3 years...and only went to the gym once or twice? Do they have to cough up the $1,500 and pay if off to get "creditworthy" again? Seems like highway robbery.
Buyer approval is critical that you rightfully pointed out. Understanding ones buying power can help give realistic goals to the home shopping process and save alot of work for all parties involved in the transaction.
The playoff game is scheduled for Saturday Jan 6, 2007 @ 5pm PST
Take care!
http://www.dallasloanguy.com/docs/about_credit.pdf
Ardell, lots of advice in this free book.
1. dont pay a collection company.
2. a-paper mortgages can be had even with that collection