How Does Credit Impact Your Ability to Get a Loan?

If you have questions about how your credit score impacts your ability to get a loan, Terry Whitesell and I have answers.

Selling your home? Get a free home valuation

Buying a home? Search homes for sale on the local MLS

Are you curious how your credit affects your ability to get a loan? Today Terry Whitesell and I will answer some common questions we get from borrowers like you.

1. If I don’t have credit, how do I get it? It’s better to have no credit than to have bad credit. If you have no credit, it doesn’t mean you’re disqualified from a loan; it means lenders have to look at other factors. They’ll ask for alternative forms of credit like your cell phone bill, your power bill, your cable bill, and your rent, so make sure you pay those things on time. They’ll also check the 12-month histories on those.

The way to start building credit from there is to use your credit card responsibly and wisely and make your payments on time. Also, keep your balances low—lenders want to see about a 25% balance-to-limit ratio on your credit cards to keep your score moving in the right direction.

Lower credit will result in a higher monthly mortgage payment.

2. How do I get a loan if I have good credit and my spouse doesn’t? On a loan, lenders will look at both borrowers’ credit scores and, unfortunately, take the lower of the two scores. They’ll then rank your scores from high to low (each borrower hopefully has three scores) and use the middle score for each borrower. They’ll end up using whichever score is lower. If you have a spouse or a partner who is lower, you’ll want to do some things to build their credit score up.

3. How does your credit score affect your mortgage? There are different programs for different credit scores. Government loans like FHA and USDA will allow lower credit scores. For a conventional loan, the minimum score is 620. If you have a lower credit score than that, you’ll have a higher rate and a higher monthly mortgage insurance payment.

If you would like to know more about the world of lending, you can reach Terry by phone at (704) 267-4086 or email him at terryw@fairwayinc.com.

If you have any other questions or topics you’d like to see covered in a future video, feel free to reply to this email. I’d be happy to help you!

Have You Heard of This Wonderful Down Payment Assistance Loan?

The $15,000 down payment assistance loan through the North Carolina Housing Finance Agency is one of the best loans out there available to home buyers.

Selling your home? Get a free home valuation

Buying a home? Search homes for sale on the local MLS

Today I’m joined by Terry Whitesell, a senior mortgage planner at Fairway Independent Mortgage, to talk about a special down payment assistance program that can help you become a homeowner.

There are a number of down payment assistance loans out there that are available to you. Right now, according to Terry, one of the best ones is the $15,000 down payment assistance loan that’s available through the North Carolina Housing Finance Agency. 

“

This is one of the best loan options available for home buyers.

”

Borrowers that meet certain credit and income guidelines can certainly qualify for this loan. The best part about this loan is that the forgiveness period is very short. If you live in the house for five years, the loan is totally forgiven.

If you’re interested in down payment assistance and would like to know more, you can call Terry at (704) 267-4086, email him at TerryW@FairwayNC.com, or visit his website.

If you have any other questions or have a video topic in mind, please feel free to send me an email or give me a call. I look forward to hearing from you!