Understanding Your Credit Scores

Credit scores affect our daily lives both positively and negatively and many do not know how or why. With this article, my goal is to serve as a resource of information for those interested in their credit scores, how to get their individual scores and how our credit scores change.

As a residential mortgage lender, I see hundreds and hundreds of credit scores on prospective home buyers. Through this experience, a good knowledge of loan program parameters, a general understanding of underwriting guidelines and a very sophisticated software program, I evaluate prospective homebuyers’ credit worthiness that include credit scores.

Our credit scores follow us all through our lives. Even though you may not be buying your “dream home” now, do not for one minute think your credit scores will not affect your life. How about the car insurance? YES, credit scores are checked. How about the job you are interested in applying for? YES, it is very likely your credit scores will be checked. Why do you think credit scores are checked in such broad applications in our lives? The presumption is (and I believe rightly true) that those who have “good” credit scores are more likely to have a good driving record, a good career focus, etc.

What constitutes a “good” credit score? Consider the following short rhyme:
¨ Eight (800s) is Great
¨ Seven (700s) is Good
¨ Six (600s) is Average
¨ Five (500s) is Marginal
¨ Four (400s) is Poor

STAY TUNED FOR GREATER DETAIL ON HOW YOUR CREDIT SCORES ARE CALCULATED AND HOW TO CHANGE THEM.

Home Buying Resources

As a home buyer or homeowner, where can you turn for help in identifying the really good vendors for:
• Homeowners insurance
• Plumbers
• Electrician
• Lawn care
• Landscaping designs
• Home inspectors
• Swimming pool
• Foundation repair

The above list is almost endless and the direction to turn is not that difficult.

I suggest one or two telephone calls to get the names and contact information on the "best" vendors for your home buying or homeownership needs - can you guess who those two very important people are?
• Your favorite mortgage lender
• Your favorite real estate agent

As a mortgage lender active in the community, I often have direct experience with trustworthy vendors who are able to help home buyers and homeowners with vitalcontact information on those "special" vendors. Do not hestitate to ask your lender or real estate agent for recommendations to help ease the numerous home ownership issues.

How can I help you today?

How to select a mortgage lender

"Dream Home" financing does not have to be complicated whether it is a first home purchase or the last and best home purchase.

In searching for the "best" lender, home buyers will typically request and receive information on interest rates, loan terms and pricing/costs. I often suggest to home buyers to get better acquainted with your prospective lender as you did with the real estate agent. The "cheapest" rate is not always the best value. How much if a home buyer gets put through the wringer and then surprised at the closing table with a higher interest rate and/or terms.

The most difficult decision for a home buyer to evaluate is how to compare a particular lender's intangible benefits and level of attention. How can a home buyer rate a person at the end of a toll-free 800 number in "who knows where?" I cannot offer any good advice since I, personally, like to establish a personal relationship with those I frequently do business with. Having a relationship with a lender is very valuable should questions arise or if something happens. After all, this is one of the largest purchases we make in our lives and the relationship can be the difference between a "great" experience and a "bad" experience.

The simple suggestions I can offer for selecting the "best" mortgage lender are:
• Interview your lender and ask hard questions
• Be sure to question the lender about his/her experience
• Request references of previous clients
• Check the lender's website for critical knowledge levels