FAQs
Why is my credit score different with you than when I get it from another site?
Can I still get a loan if I have bad credit?
Some of the 3rd-party services offering credit scores use "VantageScore" credit scores, which is a predicitive score and is not the acutal scores that lenders use to make decisions on credit applications. In many cases, only two of the three major credit bureaus are used to create the predictive score. There are dozens of scoring models to calculate your score. Mortgage lenders (and auto lenders) use specific industry credit scores that are customized for the type of credit product you are applying for. It is best to check your report for accuracy and look at the dates (DLA) when credit is reported and updated as this can impact the score. The only free, federally recognized accurate reporting is www.annualcreditreport.com
You can! There are many loan options available regardless of credit profile. Depending on the exact nature of the credit issues it may be possible to obtain a loan with as little as 3.5% down. More severe credit issues may require a down payment as high as 20% down. The best thing to do is talk to a loan officer to determine what options are available.
What is the difference between home owner's insurance and mortgage insurance?
What does "pre-approval" mean?
The term "pre-approval" can have different meanings depending on the lender. A pre-approval generally means that you have provided your personal information to the lender (including income, assets and employment) and the lender has obtained a credit report and reviewed your credit history. If you receive a pre-approval this means that based on your credit report and the information you provided the lender, you may qualify for a specific type of mortgage up to a certain loan amount. An approval takes this a step further by submitting a full loan application to the lender, including documentation such as paystubs and bank statements. An underwriter for the lender will review this information along with the credit report and make a final determination on your eligibility.
What is an FHA loan?
An FHA loan is a loan that is a mortgage that is insured by the Federal Housing Administration (FHA). This insurance helps protect the lender in the event a borrower defaults on their mortgage, which in turn allows the lender to offer less restrictive guidelines since the loan is guaranteed. FHA loans are available for as little as 3.5% down and it may be possible to obtain financing with a credit score as low as 500.
What type of mortgage should I apply for?
This is the main reason to work with a loan officer. In a 2017 survey conducted by Harris Poll, 44% of Americans believe you need a down payment of 20% or more to buy a home. Conventional loans are available for as little as 3% down, FHA loans as little as 3% down and VA and USDA loans as little as zero down. Jumbo loans up to $1.5 million are available with as little as 10% down. Loans for borrowers with recent credit events, such as bankruptcies and foreclosures or self-employed borrowers who cannot qualify with the income listed on their tax returns may have options available with as little as 10% down. With the high volume of loan products available these days, not working with a loan officer could result in choosing the wrong product which could cost tens of thousands of dollars over the life of the loan.
Home owner's insurance, also known as hazard insurance, protects you, the homeowner, in the event of fire, flood, theft etc. Mortgage insurance (MI) protects the lender in the event the borrower fails to repay the loan. Depending on the loan type, MI can be paid avoided or reduced based on the size of the down payment. Talk to Cynthia Rock for more information.
What are closing costs?
Closing costs are fees associated with buying or refinancing a home. Even individuals paying cash for a home will have closing costs. The amount of closing costs vary based on whether or not you obtain a mortgage, the lender you use and the type of loan you obtain. Closing costs are one-time fees due when you show up for your loan closing.
How does refinancing work?
In most cases, refinancing is the act of paying off an existing mortgage on a home using a new loan that has more attractive terms. More attractive terms could mean a lower interest rate, a shorter loan term to pay the home off more quickly, or accessing the equity in your home for cash-in-hand. The loan process for refinancing is very similar to that of purchasing a home, however, some programs allow for 'streamline' options where employment, income, assets and/or appraisals may not be necessary. Talk to Cynthia Rock to help guide you to the best refinance option for your situation.
What is a conventional mortgage?
This is the main reason to work with a loan officer. In a 2017 survey conducted by Harris Poll, 44% of Americans believe you need a down payment of 20% or more to buy a home. Conventional loans are available for as little as 3% down, FHA loans as little as 3.5% down and VA and USDA loans as little as zero down. Jumbo loans up to $1.5 million are available with as little as 10% down. Loans for borrowers with recent credit events, such as bankruptcies and foreclosures or self-employed borrowers who cannot qualify with the income listed on their tax returns may have options available with as little as 10% down. With the high volume of loan products available these days, not working with a loan officer could result in choosing the wrong product which could cost tens of thousands of dollars over the life of the loan.