the TWO HEADED Monster

Mortgage and Lending with Christensen Financial Mortgage 385907

Okay when it comes to credit everyone knows you've got to have the score.

These numbers may determine whether you can, or cannot be approved for the mortgage you need and desire.

I mean if you're looking to qualify for a government loan and you've got a least a 620 (some lenders want 640) score than your credit meets the requirement, right?

Well. maybe, but maybe not.

because credit is really a "two headed monster" and while the score may meet the requirements, the credit profile which creates the score may not be acceptable.


Let me give you a couple examples here;

if you have a 635 score, for instance, and the score is low because you've just had 2 unpaid medical bills posted recently, then you may be okay


if you have the same 635 score and the score is low because you've had 3 late payments on credit cards in the last 6 months, then you've got a problem. In this case

the credit profile which is creating the score will be unacceptable to most underwriters, even though the score meets the guideline.

While we're on the credit thing let me point out another potentially conflicting and/or contradictory situation with credit.

those consumer credit reports that are being marketed/sold by experian, equifax, and transunion are not the same reports that are being used by your mortgage lender, so the scores may be different.

the mortgage lender uses a mortgage credit report and they use what is referred to as "lower middle score."

here's a brief explaination;

if there is only one buyer than the lender pulls a tri merged credit report, that is a report that gives all 3 scores (equifax, experian, and transunion) and they the use the middle score. That's right throw out the high score, and throw out the low score, and use the middle.

if there are 2 borrowers the lender uses what is referred to as the lower middle score. That would be the lowest middle score of the two borrowers.

doesn't seem fair now, does it?

doesn't to me either, but...

that's why I look at credit like a TWO HEADED Monster



Comments (2)

Bud & Beth McKinney
Cary/Raleigh/Apex NC - The Team That Cares, RE/MAX United

Credit is all sorts of all over the place, there needs to be a mandatory class in schools that actually perhaps kids by telling them these kinds of things. I am not saying parents cant help out with that, but I dont think they understand these kinds of things which leads to the problems.

Dec 21, 2012 12:47 AM
Jay Beckingham
Christensen Financial Mortgage - Port St Lucie, FL
Seniors ROCK!

I teach a first time homebuyers clas covering both credit and mortgages. for the credit class everyone starts the same way with the same statement

"make your payments on time"

i wonder if it sinks in.



Dec 21, 2012 12:52 AM