The all-important credit score - know exactly where you stand.
Credit scores range anywhere from 350-850. The higher the better. Your number is determined by five factors combined to calculate your personal score. Even if your score is lower than desired, don’t give up. With a little clarity and focus, a lot can be done to make things better.
Types of Credit - 10%:
This looks at what types of credit you have.
New Credit - 10%:
New applications for credit might cause you to be risky and lower your score.
Length of History - 15%:
How long your accounts have been open. If you are going to close an account, DO NOT close the oldest.
Payment History - 35%:
Making sure that you have your payments in full and on time.
Debt Utilization - 30%:
How active EACH of your accounts are will affect this portion of your score.
Immediately inform your Loan Officer if there are any changes in your employment, income, or assets.
Continue living in your current residence.
Continue making all mortgage or rent payments.
Continue to make payments and stay current on all existing credit accounts.
Be prepared with an explanation for any credit “blemishes” and recent credit inquiries.
Research and select a preferred homeowner’s insurance provider.
Make any major purchases or home improvements.
(ie. auto, boat, appliances, furniture, pool)
Apply for new credit or loans.
Pay off any charge-off accounts, collections, loans, credit cards, or consolidate debt.
Close any credit card accounts, max-out, or over-charge credit accounts.
Change bank accounts of transfer balances from one account to another.
Change the source of your “closing funds.”
Deposit large amounts of cash into your own bank account without proper documentation.
A little preparation in advance, will keep you moving quickly all the way home.
Get ready. Get set. Go, go, go!
Items that may be requested during your home loan process:
Valid photo identification
Bank/asset statements for the last two months on all checking, savings, stock, mutual funds, IRA, or other liquid assets you would like on your loan application
Pay stubs for the last 30 days
W-2 forms for the past two years
Federal tax returns for the past two years, including all schedules
If self-employed or you own more than 25% of a business, copies of business tax returns for the past two years, including all schedules. Provide all K-1’s to prove ownership interest in any entity.
For other real estate owned, we need loan information, monthly payment, and any rent collected
Home owners insurance contact info
Landlord/mortgage company information for past two years
Certificate of Eligibility and DD-214 or Statement of Service, if applying for a VA loan
Bankruptcy or property short-sale/foreclosure information
A copy of the settlement statement if you sold property in the last three months
Child support payment info, copy of divorce decree and/or separation agreement, if applicable
A copy of the signed real estate contract, if you’ve already made an offer on a home
Resident alien card, front and back, if applicable
For Refinancing your home, some additional information may be needed:
Current mortgage statement for property you want to refinance
Current second mortgage or equity line statement for property you want to refinance
Estimated value of your home
Recent annual Homeowners insurance policy statement for the property you want to refinance