CREDIT IS KING NOW!

Never before has credit been so important. With the new government rules for a 600 beacon score, people applying for mortgages now need to extra vigilant about their credit. This is especially true if you are thinking of downsizing due to debt load. Lenders, who at one time couldn’t really care less how much debt you were carrying are now looking closely at your credit utilization. If you are maxed on all credit, you may have difficulty getting a new mortgage now.

We have had a few cases where people who have good credit, but missed one payment , scores dropped below 600 and then found out the hard way that they could not get a prime bank mortgage. And even if you have been pre-approved for a mortgage does not mean you will necessarily get a new mortgage. Especially with bank pre-approvals, the pre-approvals are only a rate hold. The banks often have not pulled your credit or even reviewed your credit. So it’s ‘surprise, surprise’ when homeowners find out from the bank they were approved at, were not really approved. As mortgage professionals we do a much more thorough pre-approval by reviewing credit and income. If there are issues, we address them during the pre-approval process rather than having your mortgage declined after you put an offer in.

There’s been a trend lately for lending institutions to expect more on how much credit you have opened. The optimum is two credit facilities, one loan and one credit card or two credit cards with limits of at least 1,000.. We had an instance lately, where a new lawyer with only one credit card but had several loans and credit cards closed and paid off ,had some difficulty getting a mortgage. We thought this is crazy. The lawyer was responsible and paid off his debts. The lending institutions saw it differently. They felt he didn’t have enough credit open. So there is a lot of damn if you do and damned if you don’t going on in the mortgage business now.

We don’t make the rules, as ridiculous as some of them are. But we are in your corner battling and orchestrating through the mortgage minefield process. Get the best professional mortgage advice by calling us first before you put an offer in or even thinking about doing something with your financial situation. We always have your best interests at heart.