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Fix Your Credit Score Quickly Qualify for Mortgage Loan

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Fix Your Credit Score Quickly to Qualify for a Mortgage Loan

This BLOG on Fix Your Credit Score Quickly to Qualify for a Mortgage Loan Was UPDATED by Bill Burg on December, 29th, 2017

 

To quality for any mortgage loan program there is a minimum credit score requirement that the lender requires If you apply for a lender with “No Bank Overlays” it will be lower.  However, it is to your advantage have your credit scores as high as possible prior to applying for a mortgage. The simple reason, the higher the credit score, the lower your mortgage interest rates will be.  A few points equal thousands or possibly tens of thousands of dollars over the length of your loan.

The following are the current guidelines and each minimum credit score required.

  • For a 3.5% down payment home loan, FHA requires a 580-minimum middle credit score.
  • Although, VA has no minimum credit score requirements, a veteran home loan borrower, should have a 580-credit score or more to get an approval via Automated Underwriting System eligibility.
  • A Conventional Loan with Fannie Mae (FNMA) and Freddie Mac (FHLMC) has a 620-minimum credit score
  • A USDA requires a minimum 640 credit score or better.
  • Jumbo Lenders (a Home loan that is typically higher than $424,000) normally requires a minimum of a 700-middle credit score
  • IF your loan will have a 90% LTV or Loan to Value ratio (10% down payment on Jumbo Home Purchase) and requires a 740-minimum credit score or higher.
  • A Condotel and/or Non-Warrantable condominium mortgage loan requires a minimum 680 credit score or better.

 

This may be the most important thing to know about lenders and credit score requirements. The proceeding is the bare minimum middle credit score requirements. Most lenders will have additional lender overlays on credit score requirements and other added requirements, so even if you qualify and are higher than the scores listed above, you still may be turned down.  Mortgageledingplace.com and USA Mortgage have no additional bank overlays on conventional and/or government home loans, so we just provide loans based on the above minimum credit score mortgage guidelines.  It is still true, the higher your scores are the better you interest rate, but we say yes, more often.

Credit Scores and your debt to income ratio (DTI) are the most important factors in getting a residential mortgage loan approval and decide what mortgage plan you can get approved with.

 

  • Even though you might have a great income and a low DTI ratio, having a low credit score can still get you turned down for a mortgage loan. 
  • If you do have a low credit score there are some Quick Credit Fixes to help you Qualify for a Mortgage loan.
  • To qualify for a 3.5% FHA mortgage loan, the minimum middle score required is 580 or higher.
  • IF you have a 579 FICO middle credit score or under, you can still qualify for a FHA mortgage loan. The best thing to do is ask your experienced mortgage loan officer.  The loan can be approved if you put 10% down payment or more.
  • If you have a middle credit scores between 500 and 579, you will need at least 10% down and an approve/eligible to qualify for an FHA Loans. 
  • The good news is there are Quick Credit Score improvements to help you Qualify you’re your Mortgage and can quickly raise easily your credit scores.

 

Boost Credit Score Instantly: How to Fix Credit Fast to Buy a House

One of the questions I am asked constantly is how to fix credit fast to buy a house.  If you have several credit cards with high credit balances (over 10-30% of the total available balance) you can easily and quickly improve your credit by paying down the existing credit card balances.

 

  • It is usually best not to completely pay them off, but reduce the balance.
  • According to the experts, the smaller balance and continued use will maximize your points to your score each month
  • If you pay down the balances, you can increase you credit scores by as much as 50 or more points depending your credit reporting agency and how it relates to your credit profile. 
  • Total percentage of the total credit limit is ones of the largest factors when credit scores are calculated each month.
  • IF you have less than a 580 FICO Score, check your credit balances compared to the total credit limit. If they are high, it is limiting your point given each month.
  • The experts advise if you are going to need to use them, limit the use to 10-30 % of the limit, but if you can, pay them off and leave a $10-$30-dollar balance on each month. In other words, just use it once for gas or just to maintain a balance.
  • This tip on how to fix credit fast and how to fix credit fast to buy a house works 100% of the time.

 

Secured Credit Cards for Borrowers with Bad Credit Can Boost Credit Scores Instantly and Help with Mortgage Ready Credit Repair

There are many cases is which you pay your bills on time and you are told you have bad credit.  The answer is usually prior bad credit, no credit, or not enough credit.  This may be the only reason for no or low credit scores.  The go to quick fix in these situations is to get one to three secured credit cards.

 

  • By adding secured credit cards, you can easily boost their credit scores by at least 20 or more points each card. Remember use them sparingly and don’t go overboard.  Having too many lines of credit can also hurt you chances of buying a house.  Remember the old saying, everything in moderation.  This hold true with credit.
  • The experts typically agree one to three $300- $500 credit limit secured credit cards will increase you credit points the quickest. If you have three, you will super boost your credit points and may just be the trick to get a mortgage ready credit repair.
  • Note: a secured credit card is one which you have deposited a secured or temporarily unavailable amount of your money in a locked checking or savings account. So, don’t use your rent money, it will be unavailable until a time when you can apply for a secured version.
  • By doing so credit scores will increase instantly and they can improve as much as 70 or more points depending on individual situation. 
  • I know it sounds repertory, but go have a credit card shopping party and max out all your credit cards.   You will only be hurting yourself and your shopping can later after you buy your most important investment, your new home. Now, that is fun shopping. lol
  • One more time, do not let your credit balances exceed 30% of the total available credit limit. 
  • One important factor, most people do not know, as a credit cards are used over time, it is judged as more important in evaluating your credit scores, so the points go up for that card.

 

Quick Credit Score Fixes to Qualify for Mortgage:  A Zero Credit Balance Adds Zero Points to Your Mortgage Ready Credit Repair

Credit Cards and Secured credit card are the easiest, and fastest Quick Credit Score Fixes to Qualify for Mortgage. To maximize you points each month on your credit reports, optimize each item in your credit report.

The reasons why are:

  • Any time you maxed out or go to a high limit on a credit card, that item can plummet your credit scores. It shows you either need it survive or cannot control your money.  Either way, the points sink and so can your chances of buying a house. 
  • I have seen many people finally get their Loan Approval Letter after months of credit repair only to go shopping for items in the house, just to find out that they maxed out all their credit cards and loan was denied, just before the loan could be closed.
  • If you did make that mistake and it drops you credit scores temporary, the good news if you pay them to a much lower limit, your credit scores will start to increase the next update period, but you are delayed in getting your mortgage ready credit repair.
  • To maximum points given towards your credit scores, make sure your balances are lower than 10% of the total credit limit.
  • It is a secretive process, but the experts say, that the computers at the credit bureaus calculate credit scores is by taking credit card balances and dividing it by the total credit limit which computes to a factor and points given towards your score.
  • Note: if you have a zero balance, any credit limit dividing by zero, will calculate as zero.  So, it did not help your mortgage ready credit repair.  I always remember the song, By Billy Preston, “Nothing from Nothing Leaves Nothing, you got to have something, if you want to be with me.”  That is true in your credit repair to buy a house. 
  • There always needs to a small balance on their credit cards when using this quick credit score fixes to qualify for mortgage,

 

Getting Added as Authorized User on A Credit Card:  Make Sure It Has a Perfect History.

Your History can be their history by being added to another person’s credit card as an authorized user, it will only help you if:

  • If the credit card is a spouse with the same last name living at the same address.
  • Family member or a close relative with same last name living at a different address.
  • It is a Family member or Relative with a different last name and living at a different address.
  • Note: If you do not need to do this, most experts advise against this.  It might work in the short term, but what can happen in the future, sometimes does and if they have financial problems, your credit might also be affected
  • The main user on that credit card needs to have a perfect payment history and as we have talked about before a low balance on that credit cared.  

 

I would recommend as soon as you can, and you have secured the loan, have yourself taken off the credit cards.  Your credit score can plummet if the authorized user does not maintain his perfect credit history and co-existing credit score.  As soon as possible or as needed, have the main user remove you as authorized user. This will increase credit scores, minimize your long-term risk and most likely make the other person feel better about your relationship.  Don’t forget them at their Birthday and Christmas, they may have been the answer to your Mortgage Ready Credit Repair.

We specialize in helping mortgage loan borrowers who have problem credit or poor credit scores quality for mortgage loans.  If you are thingk about purchasing a new home, but have poor credit scores and want to improve.  Contact Bill at 941-444-0010 or text Bill Burg on his cell phone for a faster response.  You can also email us at contact@mortgagelendingplace.com or even start your application at mortgagelendingplace.com.

Bill Burg is a 3-time Author in teaching other about the Financial and Real Estate Business.  He is an experienced Senior Mortgage Loan Officer with USA Mortgage and USA Mortgage is one of the few banks that has a business model of success without adding Bank Overlays.  Overall, he has invested the last 13 years helping hundreds of families and investors achieve the dream of home ownership.

Bill Burg at Mortgagelendingplace.com and USA Mortgage NMLS# 1647508

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