How Credit Scores Affect Mortgage Boise
Mortgage Boise is one of many companies that is equipped to help clients gain access to finance to buy a home or refinance an existing home. Refinancing is an option clients would use if they wanted to make extensions to the home or for the purposes of consolidating debt. Home refinancing can help a client obtain funds needed for home improvements and more.
Many such companies have large databases of lending institutions that they work with. Companies like this will attempt to forge good relations with the lending institutions to help as many clients as possible to get money. Many of them have a short form that can be completed to find out what the procedure is and what fees are due.
These lending facilitators are charged with the task of shopping around on behalf the clients to get the best rates and service possible. They will also be able to help in applications for a variety of different loan products. There are certain criteria that are used to assess whether clients are eligible for a loan or not. Some factors include the employment status of the applicant, as well as their income and expenses. The affordability is based on the payment to income and loan to value percentages.
Credit scoring is very important especially in today’s market. The global recession has left banks reeling in the aftershock and they have really tightened up their criteria. They will assess how the clients have paid their mortgage up to now. This would apply to people who have mortgages and are applying for refinancing. If there were any blemish on this history then clients would need to clean this up and show a good paying record for some length of time.
The general credit record of the client is also important. This relates to credit other than home finance. Credit cards and loans would classify as this type of credit. This score needs to be good if an application is going to be made. A good score shows that an applicant has a good payment profile. If payments are more than thirty days late, this will show on the credit scoring. This will not help the cause in obtaining finance.
The other credit checks system that lending institutions use is public records. Public records are freely available online and from several offline sources as well. This is where it is noted if clients have judgments, collections or foreclosures against their names. If clients have declared bankruptcy, this will also be documented.
Borrowers classified as A-category borrowers may not have any of this against their name within the past two to ten years. They generally make good candidates for lenders. D borrowers may currently be in foreclosure of bankruptcy.
The grading system deteriorates in direct proportion to the severity of the poor credit issues. The lower grades attract higher fees and higher interest rates. Lenders will also calculate the debt ratio to determine how much the clients are able to repay back. Dividing the total monthly debt by the total monthly income does this. This includes the living expenses with the monthly debt.
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