August 3rd, 2010
Top Credit Questions – Mortgages & Credit Scores
The rule of thumb in today’s economy is that you need a 720+ credit score to qualify for decent mortgage rates, when 650+ used to be enough in the pre-recession days. This week, credit-savvy Credit Karma members sound off and speak from experience on community questions revolving around the housing market. Move over mortgage experts and market analysts—the Credit Karma community is the new pro-consumer force in town.
Check out what’s buzzing at the Credit Advice Center…
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Q: “My current score is 713 and I’d like to apply for a mortgage. My credit card is paid off, $1,600 left on my car loan, but I do have $19,000 in student loans. I’m concerned I may not have enough active accounts. I don’t want more debt, obviously, but will I be told I don’t have enough activity?
Your Responses:
- I own a mortgage company, you’re great! You’ve got the score and as long as you don’t have too much in debt for the income and the home you’re buying you’ll be good as gold. Unfortunately the best rates come from having a 740+ score, but since rates are at an all time low right now you’ll get a rate you’ll be telling your grandkids about one day…
- You don’t need debt to have credit. Just get a few more credit cards. Use them once per month. Don’t overspend and in 6-12 months you shouldn’t have any problems with a mortgage.
- Read the rest of the answers here!
Q: Can I get a home loan on the credit score of 686?
Your Responses:
- Technically you can but you won’t have the best rate.
- Yes, you can. USDA, VA, and FHA will give you a loan with scores at 620 and sometimes even lower. Technically Conventional will also give you a loan with your 686 credit score but mortgage insurance won’t so you’d need to be putting 20% down or getting a 2nd lien for any amount above 80%.
- Check out all the answers here!
Q: Can I refinance a mortgage that is 1 month behind?
Your Responses:
- Its best to talk with a lender who understands the underwriting process and talk with to see what are their guidelines. Usually, if a payment is behind, it delays the refinance…
- I don’t know for sure but I would tend to think no. Even if you could do you think that someone would want to pick up your debt that you’re not paying on?
- I do know for sure that you can’t trade a vehicle in for another if you’re behind on the payments. My auto loan company had posted on my credit that I was behind on the payments when I tried to trade off a pick-up. The current finance company had to call the future finance company to verify that it was a mistake on my credit record before the loan could go through…
- Full answers here!
Q: Can you get a home loan that has been paid in full removed from your credit report?
Your Responses:
- You would have had to make the deal to remove the negative reporting before the payment was made. Most times they will agree to remove the late payment when you pay in full. You can call the lender directly and ask them, but you may be stuck with it. Next time make the deal with the lender first, and GET IT IN WRITING!!!
- Your credit HISTORY is reported, not just your current accounts. The house payment is a valid part of your HISTORY.
- Read the entire question here!
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Very informative read. Mortgages and credit scores are just two of the common topics that make an average person financially confused.