5.5% vs 6.35% is a huge difference on a mortgage. I wouldn't blow that off as it would be a make or break situation to some people.
Credit Scores Suck
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5.5% vs 6.35% is a huge difference on a mortgage. I wouldn't blow that off as it would be a make or break situation to some people.
I don't think anyone mentioned this yet, but keep in mind that almost every mortgage company is going to have a third party pull your 3 credit bureaus, and put them into a nice neat report for the mortgage company to use. This just makes things a little more difficult.
This is also why I suggest seeing if you can get the lender to make an exception with just the letters on their own without the bureaus. If not then you will more then likely need to get all three bureaus fixed, and then hope that the company they are using to blend the reports together also fix the problem. Allot of lenders will say they got the info from the bureaus, but in these cases make sure that you are asking specifically if they are using one of these reports from a 3rd party, or actually from the credit bureau website. Many times people start off on the wrong track trying to get the wrong people to fix things because they are not sure who is really reporting the info incorrectly.
This is also why I suggest seeing if you can get the lender to make an exception with just the letters on their own without the bureaus. If not then you will more then likely need to get all three bureaus fixed, and then hope that the company they are using to blend the reports together also fix the problem. Allot of lenders will say they got the info from the bureaus, but in these cases make sure that you are asking specifically if they are using one of these reports from a 3rd party, or actually from the credit bureau website. Many times people start off on the wrong track trying to get the wrong people to fix things because they are not sure who is really reporting the info incorrectly.
If a morgage is 7% and your investment account makes 15% are you really saving money by paying cash for the house?
Depends on how long he plans on keeping the house.
I'm currently working with two lenders. My credit score when I initially had my credit ran, it was a 740 something, and because I'm only twenty and haven't established strong credit history, two mortgage inquires dropped my score right at 710. Which is BULLSHIT because I have perfect credit history. It is definitely upsetting because in all reality as long as your credit history displays sufficient results, there shouldn't be any problems! Damn them!
I strongly suggest that you speak with both lenders and see what they can do to accommodate your needs because they want your business. There are several different programs out there right now, for individuals with POOR credit scores, and being that your credit is not a result of delinquency, I am almost certain they should be able to find something!
I am settling with WellsFargo, with an interest rate of 5.75%.
GOOD LUCK!
I strongly suggest that you speak with both lenders and see what they can do to accommodate your needs because they want your business. There are several different programs out there right now, for individuals with POOR credit scores, and being that your credit is not a result of delinquency, I am almost certain they should be able to find something!
I am settling with WellsFargo, with an interest rate of 5.75%.
GOOD LUCK!
Actually, we don't know how long he'll own that particular property. If like the average American, he moves out and sells the property after 5 years, the difference in additional interest is minimal (approx $600/yr). Most of which can be written off.
As to the credit score issue, (assuming that he didnt apply to 20 lenders in a 2 month period) I bet that the lenders are using two different bureaus. FICO scores can vary substantially from bureau to bureau. Now, if they both pulled a consolidated report, one of the lenders is probably using the lower of all scores to quote a rate. I would ask them how they determined the rate.
You also have to look at the origination points, maybe the second lender's fees (points) are lower than the first thus negating the additional (almost) interest. Bunch of stuff to consider here. Not really cut and dry.
Hmm, just a thought....ask them how much it would be to buy down the rate to 5.5%. It might be benefitial.
Hope this helps.
Regards,
JoeS
Make sure all your credit cards are more than 30% full. This will increase your score in a very short time.
Your credit score will never go down that many points due to an inquiry, hard inquiries do not damage your credit as much as past due payments, or balances on your cards/loans.
Not sure of the mortgage you're getting but those with an ability to pay looking for jumbo or super jumbo loans are being shafted, you wont find loans in the 5's most are 6.5 - 6.825
If you need a hand with a mortgage i know a lot of people who can help you out. Feel free to reach out to me.
Not sure of the mortgage you're getting but those with an ability to pay looking for jumbo or super jumbo loans are being shafted, you wont find loans in the 5's most are 6.5 - 6.825
If you need a hand with a mortgage i know a lot of people who can help you out. Feel free to reach out to me.
^^^You can't pay for a better credit score...I think you mean pay points? That is an option although not recommeneded unlesss you plan on staying and paying for 30 years.
I was a mortgage underwriter and all the loans were backed by fannie mae which has some strict rules. Credit score was one you couldn't usually get around. Are you putting 20 % down? If so the underwriting gets alot less strict.
I don't understand your credit drop. If you have no bad debt and no issues it really shouldn't have dropped like that. Inquires on a 1st mortgage should not have caused that. There is a 60 day freeze on your credit score when you are inquiring for mortgages for that reason alone (they know people arent going to go with the first pre approval they get) (by freeze I mean on just the inquires part, many other factors can effect your score)
What is the time frame between A & B? Did you say you have zero debt? So you have no credit cards? Here's a word of advice for anyone reading this. Get a credit card open it to the max limit you can and then keep it at about 20-30% debt. (paying it off monthly is fine) The older the card the better. I have a credit card that has been open for more than 10 years.
My advice to you would be to get the Lender B to pull your score again. Those things can flucuate wildly from one moment to the next. I had to do the same for a few of my clients and there was sometimes a 15-25 point difference even in a span of a few days.
You can PM if you have any more questions.
EDIT: Oops I read netphases pray as pay.
Also have you reviewed your credit report lately to see if there's anything strange on it?
I was a mortgage underwriter and all the loans were backed by fannie mae which has some strict rules. Credit score was one you couldn't usually get around. Are you putting 20 % down? If so the underwriting gets alot less strict.
I don't understand your credit drop. If you have no bad debt and no issues it really shouldn't have dropped like that. Inquires on a 1st mortgage should not have caused that. There is a 60 day freeze on your credit score when you are inquiring for mortgages for that reason alone (they know people arent going to go with the first pre approval they get) (by freeze I mean on just the inquires part, many other factors can effect your score)
What is the time frame between A & B? Did you say you have zero debt? So you have no credit cards? Here's a word of advice for anyone reading this. Get a credit card open it to the max limit you can and then keep it at about 20-30% debt. (paying it off monthly is fine) The older the card the better. I have a credit card that has been open for more than 10 years.
My advice to you would be to get the Lender B to pull your score again. Those things can flucuate wildly from one moment to the next. I had to do the same for a few of my clients and there was sometimes a 15-25 point difference even in a span of a few days.
You can PM if you have any more questions.
EDIT: Oops I read netphases pray as pay.
Also have you reviewed your credit report lately to see if there's anything strange on it?
Funny this thread came up, I started charging $30k - $40k a month or so in the last few months for PPC (this coming from a person who originally had pretty low credit lines), just pulled a report a couple days ago, and I fell from 3 excellent's to 3 good's - but I'm guessing this has to do with "utilization %" .... argh. Pay on time, in full, every time. But yea, credit scores do suck.
What does your credit report say the balance is? Doesn't matter what your statement says, it's what the most recent activity on your credit report.
Everyone here is offering good suggestions, but here is why I believe your score went down a bit:
1. Your age
2. Your age of existing accounts
3. Your credit availability - I don't care if you have a plum card with no limit and pay it off regularily. If you've got a 200k balance on your card when it's reported, the agencies will look at that as debt.
Obviously assumptions based off of what you've publicly disclosed.
Your rate shopping would not cause that big of a drop. It's something else...
Also, unless you are doing some sort of 5/1 ARM there is no way the current rate for the loan is at 5.5%.
I just re-read that part... that's actually normal. They pulled from different bureaus...
Example... my three reports (p.s. I don't give a shit about credit. Give me a credit card and I'll max that bitch out in a day on ipods for my friends):
Experian: 508
Equifax: 532
TransUnion: 500
Unless home lenders pull all three? In that case who the fuck knows.
Doesn't having too many credit report inquiries lower credit scores?
For mortgages I think they take the middle score of the three credit bureaus.
For mortgages I think they take the middle score of the three credit bureaus.
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