Financing the purchase of your home is perhaps the most important aspect of the purchase process, at least for those of us who don’t have the ability to pay cash for a house. There are several aspects of getting a mortgage that you have some degree of control over. For this post, we will focus on your credit score, or FICO Score, as it is known in the industry.
There are three major credit reporting agencies: Equifax, Experian, and Transunion. Your FICO Score is calculated from these sources, and includes other parameters as determined by Fair Isaac, the company that produces the FICO Score. Mortgage lenders tend to use what is known as the Low Middle Score, or middle score. So if your FICO Scores are 710, 708, and 689, the mortgage company will use the 708 score. Most people don’t realize this.
Many factors go into the calculation of the score. Among these are Payment History 35%, Amount Owed 30%, Length of Credit History 15%, New Credit 10%, Types of Credit Used 10% See http://www.personalmortgagebrokers.com/FICO_scores.php for more detail.
We have home buyer clients come to us with scores of, say, 599, looking for 100% financing. Unfortunately, to qualify for this Zero Down loan, lenders generally require a score of more than 600, and since this is an automated calculation, you should know that your loan officer has little control over the approval if you do not mean the minimum criteria.
But there is a way to deal with this: you can do some quick fixes that can boost your score. We have dealt with buyer clients who, when executing the recommendations we advise them to, they boost the score by 20 points in as short a time as one or two weeks. This small effort and short time enables this particular client to achieve the loan criteria, and thereby purchase the house of their dreams with Zero Down Payment.
Ask us to assist you in this sort of credit fix. http://www.personalmortgagebrokers.com/contactus.php
