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716 Credit Score – Increases And Decreases Of Credit Scores During Mortgage Process in 2019

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Increases And Decreases Of Credit Scores During Mortgage Process in 2019

1. Income and credit scores during mortgage process are probably the two most important factors when it comes to qualifying for home loans.

– If offered a choice between the two, I would say income is more important
– This is because loan applicants can get a mortgage loan approval with bad credit with documented income
– However, cannot get a mortgage loan approval with great credit but no income
– Regardless, credit scores will dictate how much down payment determines the following:
– Down Payment on FHA Loans
– Debt To Income Ratios on FHA Loans
– Pricing on the private mortgage insurance premium on conventional loans
– Pricing on mortgage rates

2. Fluctuating Credit Scores During Mortgage Process
*Which Credit Scores Will Lender Use?

Lenders will use the middle credit score of the lower credit score borrower if there is more than one borrower. A lender will only use initial credit scores during mortgage process that is originally pulled. Most lenders will just stick with the original credit scores until the loan closes. However, Gustan Cho Associates can repull credit during the mortgage process and if borrowers scores are higher. We can use the higher credit score for pricing and locking the mortgage interest rates.

– A mortgage loan originator will not have applicants sign the official 1003 mortgage application and disclosures
– A mortgage loan originator can start the mortgage process as long as the borrower meets the minimum credit score requirements
– Mortgage application and disclosures are sent to borrowers
– If there are errors in credit report during mortgage process which is drowning credit scores, the loan originator can help correct the errors by the use of rapid re-score
– Rapid Rescores expedite errors and can update tradelines reported to the three credit reporting agencies in a matter of 5 business days
– So the bottom line is that the lender will use the original credit report and credit scores that was originally pulled to qualify for mortgage loan

Home Buyers and/or homeowners who need to qualify for a mortgage with a direct lender with no overlays on government and conventional loans can contact us at The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are always available 7 days a week.

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