Credit Archives - Stonebriar Mortgage

How Your Credit Score Affects Your Mortgage Rate

From your income, to your bills, to your lines of credit—many factors influence your credit score. The score follows you through life and impacts numerous things, including your ability to buy a home. Whether your score is high or low will determine the rates and terms of your mortgage. This week, educate yourself about how your credit score impacts your mortgage rates with Stonebriar Mortgage in Dallas, TX and California.

Getting Approved for a Mortgage

The higher your credit score is, the better your chances are for getting approved to hold a mortgage. Your credit score also influences your ability to obtain pre-qualification for a mortgage. If you are considering how your credit score will impact your life, you can always get professional help from a credit counselor. You can also seek advice from the team at Stonebriar Mortgage.

Rating Your Credit Worthiness

If you have a high credit score, and other good traits sought by lenders, then you can get a mortgage approved with a great rate. However, if your score is low, you may consider holding off on a major purchase until the score improves. If the low score is being caused by high debts or late payments, seek out an accredited counselor to guide you in the process of debt consolidation or paying fees off.

Your credit rating is set and highly regulated in this market. There are three different national credit bureaus that calculate your credit score: Experian, Equifax, and TransUnion. Each bureau may have a very slight difference on your score, but the way they calculate it must be consistent.

Mortgage lenders may check your scores and consider your income or other assets. Scores in the 700 and above range are considered good, as you move downwards, you will be seen as a moderate risk by banks (usually around 620 or below) and some may even decline you as you drop below the 600’s. If it does not seem like you will get a good rate for a major purchase, consider changes to improve your score by just 20 to 100 points.

Repairing Your Credit Score

If you have a low credit score, and want to improve it, there are many services available. You should research to ensure that they are valid sources and not scams. The team at Stonebriar Mortgage is here to help you. A simple way to improve your score is to ensure you pay off debts on-time, and before the date that the company reports to the credit bureau. Below are other ways people have been able to repair credit:

Debt consolidation-aim at using this only to consolidate to lower interest rates on outstanding debts and pay things off quickly.
Ensure your current lines of credit are not closed/left unused—it can increase your score by a minor amount to use an older credit card for a small purchase and pay it off immediately.
Calling companies to discuss repair—if you see a blemish on your credit report, try contacting the company to clean it up, especially if it shows there may have been an error or identity theft.

Stonebriar Mortgage is here to help people in the Texas and California markets understand how to get great mortgage rates. Even if you feel your score is low, home ownership may not be as far off as you think!

Requirements for Nationwide High Balance Loans

Nationwide High Balance Loans are a type of jumbo loan. This loan exceeds conforming loan limits set by Government-Sponsored Entities (GSEs). Many counties in California and Dallas Texas have high value homes on the market that may require non-conforming loans. The Federal Housing Finance Agency (FHFA) sets conforming loan limits annually. Approval for refinancing using a Nationwide High Balance loan, therefore, is also impacted by the annual limit. If looking to refinance using this product, note that the loan must have met conforming limits at the time it was sold to Fannie Mae. Properties can be one- to four-units, condos, co-ops, or manufactured housing.

How to Qualify for a Nationwide High Balance Loan

If you are looking to gain approval for a Nationwide High Balance Loan, it is best to meet the below criteria:

A credit score of at least 620 or more. The lower credit scores may lessen the amount of funds approved.

A maximum 80% loan-to-value amount.

A debt-to-income ratio of less than 43%.

Use of the loan for a primary or second home.

Provide ample income documentation, but less documentation than for a jumbo loan.

Provide the down payment required by the lender, though many do not usually ask for 20% like with a jumbo loan.

Pros and Cons of Using Nationwide High Balance Loans

With Nationwide High Balance Loan approvals, some lenders prefer to avoid using manual underwriting. Some interest rates tend to be higher than for conventional loans. This is because you are asking for more money, so the loan carries more risk for a lender. There are lower limits on this loan than with a jumbo loan. If you need more than a nationwide high balance loan can offer, you may have to re-apply for a jumbo mortgage. A higher loan amount or lower credit score may increase your interest rates. However, if you have great credit, they may allot you a higher debt-to-income ratio than 43%. You also do not need traditional income documents required by other programs.

Stonebriar Mortgage will help you accomplish your homeownership goals in Dallas, TX or California. We work with customers of all types and enjoy helping investors. Contact our team today and discuss the many benefits of using a Nationwide High Balance Loan.