2 Obscure Factors Influence Charlotte Mortgage Loan Decisions

By
Real Estate Broker/Owner with One Home Team Realty/Charlotte,NC 704-293-3931 246546

Credit Report Ratings

 

Whether you are about to embark on your first Charlotte home search or your umpteenth, unless you’ve managed to save enough to make you a cash buyer, soon you’ll need to secure a mortgage loan from a bank or other lending institution.

To understand what lies behind any home loan decision, just do what any good business negotiator does: put yourself in the other guy’s shoes. Getting a yes (and a low interest rate) from Charlotte’s lenders starts with demonstrating a history of responsible debt handling. That’s been made easy by the major credit information gathering agencies, who’ve been collecting data since your first credit application. Those bits and pieces are compiled and analyzed by the Fair Isaac Company (“FICO”).  Charlotte lenders rely heavily on their FICO credit score to gauge the level of risk projected for any Charlotte mortgage loan you might seek.

FICO has a good thing going. Nine out of ten U.S. credit decisions use FICO scores—which enables FICO to sell more than 27 million every day. The exact way FICO calculates their scores (and there are a variety of different ones) is a heavily guarded secret—but we do know the five components that go into each of them:

  1.       .   Payment history - hopefully, on time!  
  2.          Utilization - percentage of available credit currently borrowed.
  3.          Length - amount of time each account has been open together with the most recent charge or payment.

The reasoning behind those three is pretty obvious; they make up 80% of how FICO scores are weighted. The last two are not so self-evident, yet each contributes 10%—and that can be decisive:

  1.          New credit.
  2.          Credit mix.

Number 4—New credit—registers how many new accounts have been opened or applied for within the last six to 12 months. It’s a negative factor because it might reflect an urgent need for credit help—an added risk factor. To get the best terms for Charlotte mortgages, refrain from opening a bunch of other accounts.

The last factor—Credit mix—rewards borrowers who have a variety of credit account types. If you’ve got some credit card accounts, that’s just one type of credit. Add in a car or appliance loan, and even if you have never taken out a mortgage loan, those other two types give you a good “mix.” Because managing revolving lines of credit differs from managing installment accounts, from a lender’s point of view, a mix of responsible credit usage is preferable.

 I’m here to help clarify the many ins and outs of searching for and securing the Charlotte house you’re hoping to find—or selling the one you’ve grown out of. I hope you’ll call me!

Posted by

Wayne Bennett - Broker Owner / Realtor ® GRI, ABR, e-PRO, SFR, CDPE

Licensed in NC & SC

One Home Team Realty

O: 704.218.2064

C: 704.293.3931

F: 704.749.2030

 

http://www.CharlotteNCAreaHomeSearch.com

http://www.CharlottePropertySource.com

 

                  

 

 

 

 

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Topic:
Home Buying
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North Carolina Mecklenburg County
Tags:
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charlotte mortgages
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Rainmaker
2,662,767
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

Great information...thanks for sharing and have a wonderful Thursday!

Mar 08, 2018 07:27 AM #1
Anonymous
Wheeler

I lost my house about 3 years ago, my credit was so terrible, due to the fact that I loss my job. I can't afford to rent a comfortable home to live, because even land lords run credit checks it was the most horrible and hard time of my life . i knew i had to do something to get back on track. I read about (cyberhack005 AT gmail DOT com) whom so many people had given testimony of how he had helped them fixed their credit score , I finally give him a try. I wrote a letter for each thing on my credit report basically, and he gave me the assurance that he will fix It in 3 work days, I couldn't believe It because it sound crazy but after the 3 work days he promised my credit which was 375 increase to 735 which I also confirm on my Trans-union file. This is totally amazing. I applied for a house loan and was granted (Thanks Cyber hack!) I can now apply for any loan. Signing the papers in a week

Mar 08, 2018 08:13 AM #2
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Wayne Bennett

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