How to Read Credit Graphs

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Tips on Reading Credit Graphs....5

Reading credit graphs is important when buying a house. Learn why in this free video on real estate and bank loans.

Part of the Video Series: How to Pick a Mortgage
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Video Transcript

Conventional loans are credit score driven. The information that you have on hand with your current mortgage, your property taxes and all this comes together along with pulling your credit. That is what a mortgage loan officer has to do to find out if you're qualified for a conventional mortgage. The three major credit companies in the United States that's on everyone's credit report, they're called Equifax, Experion and TransUnion. How important is your credit score? Your credit score for a conventional loan is going to determine whether or not you're going to be able to refinance, purchase a house or obtain that equity cash line. For a conventional loan, a non-government loan, this is probably the most important issue that comes up is your credit score and we want to find out whether or not you've made your twelve mortgage payments in a row, whether you have collections, whether there's a lien or a judgment, whether there's bankruptcies, whether you've had a repossession. All of this is going to show on your credit report. The results, what category will you be in? Will you be in a conventional, conforming loan or a non-conforming loan. What's the difference between a conforming loan and a non-conforming loan? Besides finding out what are the bad things on your credit report which we hope we don't find, is what your credit score is. Now because of what has happened with the fiasco with the sub-prime loans over the last six months to a year, eligibility on your credit score has gone from 620 to get a conventional loan, they've moved that up to 660 and 680 so if you have good credit, you can still get a conventional loan, they've just tightened up a lot out there. This will show us on your credit report whether or not you're eligible for a conforming loan and all those interest rates that you see on television. That six percent, 5.99, 6.5 for thirty years. These are the ones that are on television but they don't tell you that a lot of people won't be able to qualify for those because their credit score isn't as high as they're supposed to be. Some people have no credit, some people's credit score are below the 620 which makes it really hard for them to obtain a loan although if they have a lot of assets and their income is high, there's particular waivers we can get for conventional loans.


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