Tag Archives: home loans

What Stops Most People From Getting Qualified For A Home Loan

If you plan on buying a home this year, here are couple of things to keep in mind.  So you do not kill your chances on getting a home loan this year and stop yourself from getting qualified for a home loan.   This will not cover everything that can keep you from getting a home loan but these are the two biggest things that seem to kill the deals that come my way.

1) This is the number one killer on getting a home loan, and stopping someone from buying a home.  Buying a car, is the number one killer whether that be a new car or a used car.  If you even think it may be a possibility that you want to buy a house this year or the next.  Wait on the car unless you can buy it cash or just changed your mind on buying a home.  Most car loans are for 5 years, so if for example your debt to income does not justify the car payment and a mortgage payment.  You may be looking at 5 years till you get qualified for a home loan.

Another thing even if you are planning on co-signing for your son or daughter that car payment just became your car payment.  If you do not want that debt to be considered as part of your debt, then make sure that your son or daughter gets their own checking account in their name only.  Make sure that they make the payments on time and after one year.  So that way the debt will not be counted against you, and keeping you from qualifying for a home loan.

2) The number two killer for qualifying for home loans.  Is paying your bills.  Even if they are old collections or just small accounts does not matter that it is a $40.00 balance that you may have on your credit card.  If you for some reason forget to pay your bills because you are just too stressed or frustrated for what ever reason.  Then you end up having a 30 day late or maybe even a 60 day late from the last time you had your credit checked and got qualified to buy a home.  So you find your home and submit your offer based off of your last approval.  But then a new credit check is done and now because you have some accounts showing that you paid late.  Your score just dropped a few points that could be enough for you to not qualify for a home loan.  Also if you know you are planning on buying a home don’t get any new cards.  That 10 or 20 % discount is just not worth it.

So don’t buy any new cars or even used ones, if you plan on buying a car in the near future, and pay your bills on time.  Good Luck !!


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Why You Must Know What Is On Your Credit

Your credit can really be a factor in determining where you can go in this life , such as where you want to live or getting a business loan.  You can check your credit for free at least once a year just go to http://annualcreditreport.com.  Although it does not tell you what your scores are but it does give you an idea what is reporting.  You will have to pay to get your scores.

But you really need to know what is being reported on your credit report.  You can have relatively good credit but if the wrong thing is being reported on your credit it can actually stop you from getting a home loan.  Sure you were able to buy a car no problem.  You were even approved for that new credit card.  And you just bought your self some nice jewelry on credit.  Everyone told you that you had good credit so why worry ?

The thing is when trying to get a home loan its a whole different ball game.   What lenders are looking are so much more intense than a car loan or a credit card company.  When it comes to home loans we are a “New World” now.  Many times it can be an old account that you forgot and you disputed it.  Lets say it was collection account or it belonged to someone else so you disputed it and it is showing that the account is in dispute.   Especially if this account was an old home loan showing that it is in dispute, which happens a lot. You did a short sale on your home but its showing as a foreclosure and you disputed it.  But you never followed up on it.  Guess what till you get that taken care of your lender will not be able to proceed forward with you home loan.

This is one main reason to have your credit checked just once a year and why you need to get pre-qualified before you actually go looking at homes and then want to make an offer that day on a home that you just love that you cannot even buy, because of your credit.  Because of one account you thought went away, and is still lingering on.   Now that account may be an easy fix or not, but the seller is not going to wait long so you can get your credit in order.  This is actually very common.

Know what is on your credit so you know that there is no incorrect information and that it is updated correctly as well as before you decide to do any home shopping.  Get pre-qualified first.


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Do You Know What Affects Your Credit Score

First question any one buying a home or getting a home loan wants to know is what is the rate? Reality is that rate for you may not be the same rate for someone else simply because of credit.  That’s not to say that there are not other factors in play.  But credit score has a huge impact when qualifying for a home loan.  Someone with a 700 score is going to get a much better rate than someone with a 580 score.  And even someone that makes 10k a month and even a nice down payment, but with a 500 score is going to be looking at high double digit interest rates.

Here are the five categories in regards to your credit that have the greatest impact to what your scores are.

• Past Payment Performance (35%): Do you pay your bills on time? The more recent the late payments, the lower you credit score. In fact, a 30 day late payment today hurts more than a bankruptcy five years ago.  After a few months go buy those 30 days and 60 days will hurt your scores even less.  But usually that may take as long as 6 months to a year depending on how often you have done that.   Plain and simple budget and do not get your self in a situation where you cannot pay them on time.  Do not just live within your means but even below so there is always that extra cushion for those times when the car breaks down for example.

• Credit Utilization (30%): Have you maxed out your credit lines? Low balances on a few cards are better than high balances on one or two cards. Keeping balances below 30% of the credit line increases your chance for a higher score.  Once you pass that 50% credit limit you scores are going to drop.  Just because you have a credit card limit up to 2k or 5k.  Does mean you are suppose to use it.  Your credit card was meant for incidentals and emergencies stop buying into the hype every time you watch TV.  A kiss does begin with the letter “K” but it does not mean you have to spend 5k to get one.

• Credit History (15%): The longer your accounts have been open, the better, so surfing for a new lower rate on a credit card and transferring balances can hurt your score.  Just keep in mind that most lenders in trying to get you a home loan are looking to see credit lines established for at least a year.  This is sometimes an issue for those that filed Bankruptcy because they have no established credit after a BK.  As soon as your Bk is discharged get yourself a secured card that reports to the agencies so you can start to get some scores.

• Types of Credit In Use (10%): Getting a loan at a finance company rather than a bank or credit union lowers your score. Even if you have collection accounts believe it or not they will help you maintain a certain score.  They may not give you the best but sometimes your scores can actually drop if you pay them all off.   I know the commercial says “Problem Solver Loan” and get your money in just one day.  But those so called “Problem” solver loans are the problem.  Most of them in that tiny fine print disclose that the APR is well over 100%.  So not only are you paying nose bleed interest rates.  But they actually keep you from getting a better score, than you could of gotten from lets say your credit union.  But key to not getting or having to get in that situation is just watch your spending and get a budget.

• Inquiries (10%): Applying for new credit lowers your score, but multiple inquiries from the same type of creditor – like mortgage companies or car dealers – within 14 days count as only one inquiry, and many times in getting a mortgage the point drop even within a 45 day period if moderately done will not affect you. Promotional or administrative inquiries do not count against the score – only those times that you applied for credit count.  In other words just because you are Target or where ever and they offer you 10 % off your purchase.  You do not need it, because you keep applying everywhere will cost you so much more in the long run, when your scores drop.  

It is so much easier for your scores to literally drop like a rock than it is to get them to climb up in numbers.  So watch your scores the better your score the better your rates and programs that you can qualify for.

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How To Avoid Making Mistakes When Applying For A Mortgage


To do away with the risks of paying a lot of for your mortgage it is finest to educate oneself by understanding the prevalent mistakes 1 can make along the way. You may be much more adept to finding the top deal suited for your mortgage needs.Here are some regularly made errors by initial time mortgage applicants and tips on how to steer clear of them:


Not straightening your personal finances


Among the simplest mistakes it is possible to make just isn’t sorting out your finances first when acquiring a mortgage. Many people in fact start off shopping for any mortgage devoid of considering an excessive amount of about no matter if the loan will be authorized. Because you are just creating comparisons on interests and finding feedback on which can be the better deal, you happen to be

not too concerned about your existing monetary status. Nevertheless, just before you realize it, you’ve got currently submitted your documents and end up becoming rejected bythe lender or using a mortgage that doesn’t fit your desires! Prior to even thinking of shopping for a mortgage, get all your finances in order and have all your paperwork checked and ready for submission.  Also, get hold of your credit report and be sure that all the facts on it is appropriate. If there are mistakes in your credit report it could harm your chances of obtaining a great mortgage.


Shopping for any household property devoid of pre-approval


Possibly the excitement of obtaining a dream house drive  many people make the mistake of taking a look at house with out possessing any idea on regardless of whether they can safe a mortgage to spend for it. This can be after they confuse ‘pre-qualified’ with ‘pre-approved’. Pre-qualification is totally an initial estimate of how much one particular can borrow, and there is certainly no assure you may get this quantity in the rate of interest you wish. Pre-approval means that you go through the credit checking procedure and also the lender agrees in writing to give you a particular level of money. Finding pre-approval gives you a spending budget and tends to make you a lot a lot more appealing to sellers since you’ve the financing already in spot.


Borrowing an excessive amount


Among the list of greatest blunders individuals make is borrowing an excessive amount of dollars. This could come about through a mixture of not becoming honest with your self and stress from lenders. You shouldn’t be tempted by lenders who offer you you overly generous mortgages because it is you who will spend the value in case you can’t maintain up together with the repayments. Function out how much it is possible to comfortably afford to spend every month and stick to this spending budget.


Paying for things you do not need to have


With a large amount of mortgages you might be supplied further things and spend further costs that are basically unnecessary. Though they might look a little quantity right here and there, they’re able to quickly add up and also you could end up paying a good deal more than you will need to. Make certain that your mortgage agreement only incorporates the things that you need to have, and investigate the value of any fees you consider are also expensive. If a corporation tries to charge you an excessive amount of then walk away. Keep in mind, you’ll find often other providers for you personally. Becoming careful to prevent typical mortgage mistakes pays you with a stress-free monetary life style.





Hypotec Lending aids clients across the country refinance their mortgages. Really feel Free to speak to us for any free consultation regarding your mortgage requirements. Our friendly mortgage experts are here to assist. Get Started Right now!

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