• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Its Not Just Your Credit Score That Counts For Getting A Mortgage

May 18, 2014 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email

The credit and financial choices you make today shape your future chances of procuring credit. If have a tarnished credit history, while you still may be able to qualify, it will be a document heavy process. Little lending nuances that may arise if you have credit inconsistencies…

Your Credit History Matters

Importance of credit is especially crucial when applying a mortgage because it is the largest form of credit a consumer can obtain. Be prepared to prove yourself worthy. The credit history is especially important because the history, not only supports the credit score, but also provides further insight as to what the consumer behavior has been with regards to having, using and maintaining obligations.

For example a pattern of derogatory credit items will open up questions and lender scrutiny. The credit history provides additional modeling of the possibility that a consumer with a blotchy payment history might be predisposed to not make a mortgage payment on time resulting in default.

Credit Scores 620-659

An unsatisfactory payment history would support a lower credit score, possibly resulting in a score less than 660. Conversely, a higher credit score would be supported a more satisfactory payment history such as paid on time, or paid as agreed.

What a lower score really means when getting loan.…

Borrower with credit scores between 620-659 will have credit explanations to provide regarding their credit history and/or any possible collection accounts,  charged-off accounts or delinquencies that might otherwise arise in this type of credit capacity.

To score in the 620-659 range, it is usually a combination of multiple factors, such as high credit card balances, late payments, closed credit cards, a charge off account or collections with old balances or little credit as whole.

Loan can become more pricey…

Any score within 620-659 will bear a pricing adjustment on a conventional fixed rate loan even pricier with little equity such as less than 10% down. It would not be unreasonable for a borrower to pay as much as .375% higher in rate in these circumstances.

Not Passing Automated Underwriting

All mortgage lenders selling loans to Fannie Mae and Freddie Mac use what’s called automated underwriting on each loan application. Fannie Mae’s automated underwriting engine is Desktop Underwriter and Freddie Mac’s automated underwriting engine is Loan Prospector.

Upon submitting an application for a mortgage, lender will run an automated underwriting system analysis on your credit, debt, income and assets. Effectively, automated underwriting (AUS) is an algorithm that comprehensively reviews the total financial picture a borrower represents for delivery to either Fannie Mae or Freddie Mac. If   automated underwriting results show anything other than ” approve eligible”  or “accept accept“, you may not qualify without making some time of change. Changes include increasing down payment, showing more savings in the bank, procuring a co-signor, changing loan program, or loan term and cleaning up your credit history.

Lending Credit Clean Up Tips

  • Pay down credit card balances to 30% of the total allowable line on all credit cards for example, if you have a credit card with credit line of $1000, don’t carry a balance exceeding $300.
  • If possible, payoff each credit card in full, but do not close the credit card account. Closing credit cards can create a negative credit rating which results in a lower credit score resulting in a pricier loan.
  • Prior to applying for the mortgage old collection accounts with balances can be settled so long as when doing so, account is removed from the credit report entirely as though the account was never there. Negotiating a settlement with a creditor after applying for the mortgage is different, means borrower would have to zero out the account if the old credit account has a balance exceeding $2000.

If you plan to be getting a mortgage and know you have some credit challenges, making changes to bolster your financial picture at the advice of a qualified loan professional would be a wise decision.

Need a mortgage? Think you can’t qualify? Start by getting a complementary mortgage rate quote from us online now!

 

 

 

 

 

 

 

 

 

Related Mortgage Advice from Scott Sheldon

  • Common Credit Score Mistakes Consumers Make When Getting A Mortgage: Tips To Avoid Them

    For many, seeking a home loan is an exchange of trust and privacy when it…

  • What's the minimum credit score for getting an FHA mortgage?

    You will need to have a middle credit score of 620 or better for an…

  • 10 Credit Score Loan Blunders Consumers Don't Know About

    Credit continues to be a hot topic. Having credit, maintaining credit and keeping the credit…

  • 5 Frequent Credit Mistakes Mortgage Shoppers Should Pay Attention To

    While credit standard have somewhat loosened up in home lending, make no mistake, getting a…

Filed Under: Credit Score Info, First Time Home Buyers, Loan Qualifying Tagged With: credit score, minimum credit score for loan

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window