How Does My Credit Score Effect Whether I Will Qualify for a Prime Mortgage a Subprime Mortgage?
There are several ways that a borrower can fall out of grace with the banks and lending institutions and into the subprime loan category. One of the most common ways is when their credit score drops below 620 points.
If you, as a borrower, made a mortgage payment 30 days after that payment was due, your payment was received, and you got credit for making that payment, but it was also recorded at the mortgage company as a payment received "over 30 days late". If you made your mortgage payment 60 days after your payment was due, that payment would be noted as a 60 day late.
30 day late payments on a mortgage will always have a severe, adverse effect on your credit score, for mortgage companies are obligated to send late payment information onto the credit bureaus. A 30 day late payment could even drop your score below the critical 620 threshold and thereby force you into a subprime loan.
Any 60 day or 90 day late payment will most certainly drop you below 620. Many prime loan lenders will not even look at a loan application that has a 60 or 90 day late payment, which occurred at any time during the past 2 years.
Another factor that can affect your credit score is "maxed out credit cards". If your available credit on a credit card is $5,000 and you owe $4,600 on your card that is considered a "maxed out credit card". Actually any time your debt exceeds 50% of the available credit on ANY credit card it will have a diverse effect on your credit score. In other words you actually cannot exceed $2,500 on a credit card that has an available credit line of $5,000 without it affecting your score. One easy way to fix this situation is to call the credit card company and try to get your credit limit raised, or to do a balance transfer to another card to bring your debt to under 50%, while not exceeding 50% on the other card you are transferring your balance to.
So in short, make sure your mortgage payment is the first thing you pay each month and NEVER go over 30 days without making a payment. Even borrow the money if you have to. It's that important. Furthermore, keep a close watch on your credit cards and make sure none of them exceed 50% of the available credit per card.
Do these things and you will be well on your way to keeping your credit in good standing, keeping you eligible for the coveted prime mortgage loan.
If you wish to find out more about YOUR specific situation you can go to my website and put in your information. I will receive your request by email and contact you soon afterwards.
Purchase inquiries, refinance advice and prequalification letters are always welcome and available.
Good Luck and Happy Loan Hunting.
My name is
Allen Sayble and I have been a loan officer since 2001. I specialize in hard to find loans for borrowers with less than stellar credit and income situations, but also work with refinances and purchases for borrowers in good standing. I am based out of Ashland, Oregon and can write
Oregon Home Loans and
California Home Loans. At this time in the mortgage business it is most important for each borrower to work with a professional loan officer. It's also best to work with a broker, like myself, who has access to all of the different lenders so as to not be restricted to one lending institution or bank. Please visit my website
www.mortgageconsumer.com to learn valuable information about the loan business so that you can be well informed about the loan process and make the most educated decision with regards to your home loan. You can also contact me at 541-324-9623.
