How Credit Really Works…

Has This Ever Happened to You?

You’re buying a car at a dealership.  They tell you that your Fico score is 800+ and you will get the lowest rate possible.  You order your credit report on Credit Karma and your Fico Score is 820.  Then its time to apply for a home loan and after running the credit the lender tells you, your Fico score is 720.   Why is it lower?

Do you Know Why?

Not all credit reports are created equal!  There are over 70 different credit reports that have different underwriting criteria.  This helps banks, creditors and in some cases employer make credit decisions about someone.  Better yet, they help the creditor determine someone’s financial means and their ability to pay debt on a monthly basis and/or pay debt off over time.

You Fico Scores Tell Creditors about You…

  • Do you pay your bills on time?
  • Can you afford the loan you are trying to get?
  • Do you miss payments?
  • Will you make your payments on time, every 1st of the month?
  • Can I trust you?
  • Hold a credit card balance?
  • Have established credit or not enough?
  • Any credit or mechanics liens?
  • Do you have tax liens?
  • Can you afford a credit card with a $50,000 credit limit? A 100k limit? $1m limit?
  • Will you pay me back?
  • Should I charge you a higher rate for having a lower credit score?
  • Do you qualify for the loan program?

These are just some of the questions, credit scores answer for lenders trying to make a decision to loan to you or not.

Why are They different?  

Is it being used to obtain a credit card with a credit limit of $5000 or a home loan in the amount of $2 million?  The risk associated with having a larger loan is greater.  The underwriting and qualifications are stricter and more conservative and one’s Fico scores tend to be lower.  This is the reason for the disparity of  FICO scores, from one credit report to another report.

In Summary…

If you are finding your scores are low and your looking for ways to improve them, we are experts in not only lending, but experts in credit!  We have helped 100’s of clients that got turned down by banks with poor credit and have helped them clean up their credit and obtain financing to buy or refinance property.  In addition, if you want the help of a credit professional, Money Magazine wrote a great article on credit repair and what a consumer can do.  For more info, please go to https://money.com/best-credit-repair-companies/

For more info on the above, please contact us.  Were not only specialists with credit but specialist with Residential, Commercial and Reverse Mortgage Financing.

Best Regards,

Rob McCarthy

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 6020 Hellyer Ave #150, San Jose, CA 95138

CA DRE #01165697  NMLS #121019

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

PRESSURE ON RATES AND HOME VALUES…

Rates dipped a few weeks ago however rates went up for the following reasons:

  • Lack of Real Estate Inventory for Sale (1 month or less inventory in some areas)
  • Low Unemployment (at 3.6%)
  • Lenders took to much business in.
  • Government offices are closed delaying purchases and refinances.
  • Market Volatility – Lenders don’t know how to price themselves.

See this week’s report below.  If you need anything, please contact me.

http://www.mmgweekly.com/m/index.html?SID=a2186aa7c086b46ad4e8bf81e2a3a19b

Remember, I provide 3 different types of financing:

  • Residential Financing (1 to 4 Units)
  • Commercial Financing (5+ Units, Office, Retail and Light Industrial)
  • Reverse Mortgage Financing (Conforming and Jumbo and the New Jumbo Heloc)