All Real Estate Info Blog

Ever wonder how credit scoring works. Below is a little information which may help. Generally, if you have a 550 fico score or higher, you can qualify for government loans. Conforming loans generally require a conforming FICO score of about 660 and to get the maximum loan amount, a 680 is preferred but compensating factors such as 401-k balances, investment account balances helps significantly.

Sincerely, Dave Cruse, Countrywide Home Loans 615-310-7404.

Credit Score Breakdown

Think of your credit score like you would a grade in school. A teacher calculates grades by taking scores from tests, homework, attendance and anything else they want to use, weighting each one according to importance in order to come up with a final single number (or letter) score. Your credit score is calculated in a very similar manner. Instead of using the scores from pop quizzes and reports you wrote, it uses the information in your credit report.

The number itself can range from 300 to 900. The formula for exactly how the score is calculated is proprietary information and owned by Fair Isaac. Here, however, is an approximate breakdown of how it is determined:

· 35 percent of the score is based on your payment history. This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how timely) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection, any bankruptcies, etc. When these things happened also comes into play. The more recent, the worse it will be for your overall score.

· 30 percent of the score is based on outstanding debt. How much do you owe on car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25% or less of their limits.

· 15 percent of the score is based on the length of time you've had credit. The longer you've had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.

· 10 percent of the score is based on the number of inquiries on your report. If you've applied for a lot of credit cards or loans, you will have a lot of inquiries on your credit report. These are bad for your score because they indicate that you may be in some kind of financial trouble or may be taking on a lot of debt (even if you haven't used the cards or gotten the loans). The more recent these inquiries are, the worse for your credit score. FICO scores only count inquiries from the past year.

· 10 percent of the score is based on the types of credit you currently have. The number of loans and available credit from credit cards you have makes a difference. There is no magic number or combination of types of accounts that you shouldn't have. These actually come more into play if there isn't as much other information on your credit report on which to base the score.

This information is compared to the credit performance of other consumers with similar histories and profiles

This is a new feature for my blog. Dave Cruse will be explaining loan options, every Friday, that Countrywide offers.

No Hassle Mortgage

Countrywide’s Fast and Easy ™ low documentation mortgage removes much of income and asset documentation that is normally required. I’m sure you’ll agree that less documentation will make you much happier with your home purchase experience. Program qualification is simple and straight forward. Here are a few highlights of the program:

1. No traditional application required.

2. A range of products available, including fixed rate, interest-only, and fixed-period ARMS.

3. Available for primary residences (max combined loan to value – CLTV- 95%), second homes (max CLTV 90%) and investment property (max CLTV of 75%).

4. Total debt to income generally not to exceed 55%.

5. As little down as 5% (from borrower’s own funds) for a primary residence.

6. Middle FICO score of 660 or above for primary residence and second home (max combined loan to value of 90%).

(the 660 score is only offered when working with a Countrywide Loan Consultant)

7. No cash reserves required.

8. Non-conforming loan amounts up to $2.0 million (generally 60% LTV).

9. Self employed borrower at same location for two years.

This is one of the top products offered by Countrywide. Let me show you the Fast and Easy way home. Please contact me today and let me help you be a satisfied with your home purchase experience. We are truly the only mortgage banker which offers local underwriting and fulfillment. Countrywide now funds 1 in every 5 mortgages in the country.

Dave Cruse

Home Loan Consultant

Countrywide Home Loans

615-310-7404

You just never know where the interest rates are going. This week the 10 year bond price went way up, because investors were nervous about stocks. When bond prices go up, their yield (or return) goes down. Mortgage rates are tied to the 10 year bond yield. So, interest rates plunged. Great time to buy a house or to refinance.

I decided to refinance with a rate of 5.625%. That is for a 30 year fixed loan that I will pay extra each month to bring down the length of the term. I just feel safer with a lower payment for those times when I am tight with money. For those who caught the dip in rates and wanted a 15 year rate, they got a 5.5%.

The bond yield was up yesterday, so I am sure rates followed. But, you can still get a great rate if you move fast. Call my loan guy, Dave Cruse, with Countrywide at 615-376-4500 (my office) or 615-310-7404(his cell).