Understanding Your Credit Rating

Understanding Your Credit Rating

You might have heard the terms A, B and C credit. These terms relate to credit scoring, which is a statistical method of assessing the credit risk of a loan applicant. Your score is a number that indicates the probability that you will pay back the loan. A credit score looks at items such as past delinquencies, payment history, current debt level, length of credit history, and types of credit.

A customer with A credit should have no trouble getting a mortgage and most likely will be eligible for a lender's lowest rate based on a good credit history. B credit loan applicants may be asked to provide supplemental credit documentation and letters of explanation, but should still be able to obtain a mortgage without any real difficulty. Borrowers with C credit may find loan terms and conditions less attractive than the A loans and it may take longer for them to secure funding.

Coldwell Banker Mortgage has mortgage programs designed specifically for customers with credit concerns.

These programs offer the following benefits to individuals with less than perfect credit:

• Fewer documents required
• Allows higher debt to income ratios
• Program can be applied to primary residences, second homes or investment properties
• Program includes self-employed and salaried borrowers

To prevent any surprises, it's a good idea for the home buyer to obtain a copy of his or her credit report before applying for a mortgage. That way, if there are any errors, steps can be taken to correct them before an application is placed.

If a home buyer has had credit concerns and he or she is getting ready to seek mortgage financing, concerns should be discussed honestly with the lender. The home buyer can be ready to provide a written explanation regarding any past difficulties. Most mortgage lenders know that certain personal situations such as illness or unemployment are legitimate cause for credit problems. If such a situation has been resolved and payments have been on time for a year or more, the home purchaser's credit will probably be considered satisfactory.

To find out about more mortgage info, call Coldwell Banker Home Loans 1-888-536-2721

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For more information about Bergen County NJ real estate, please visit http://bobwolfrealtor.com or

call me at 551-206-1163.