What Is Your FICO Score Should Look Like Before Applying For a Home Loan
Before handing your client their keys to their new home, typically your they will have to apply for a home loan. With today’s new technology you are able to help your clients not only prepare for their approval but also inform them about what is going on in the field. Relaying this information in your real estate blog content can help you stay current on today’s mortgage trends.
Check out our guest blogger, Corey Goldstein’s most recent article on your FICO score and what it says to your bank when applying for a home loan.
Ellie Mae is a company that receives mortgage loan applications from loan offices through their software program called Encompass 360. Well, Ellie Mae just came out with a special report on denied loans that caught my eye.
Nearly 20% of all loan applications they received in 2012 – nearly 3,000,000, where entered into the Encompass 360 program (Encompass is a system Loan Officers use to begin the qualification process for mortgage loans).
The new report expresses that those denied conventional loans had the following similar criteria:
FICO scores of: 701
LTV (loan to value) of: 84%
DTI (debt to income ratio): 27/44
Those conventional loans that were approved andclosed had the following criteria:
Those that applied for an FHA Refi loan and got denied had profiles that looked like this:
Those that applied for a FHA Refi loan and got approved, looked like this:
This is a telling sign that FICO scores need to be higher and debt loads need to be reduced or restructured.
There are many ways to accomplish this, such as asking for lines of credit increases to your credit cards or becoming an authorized user on a high limit card.
You should really inquire into how you can get approved BEFORE you apply for a new loan, write an offer on a new property or make a down payment on a “house you love”.
Increase your approval chances by understanding what can be done to help you look even better, so the bank says “Yes! Let’s give this guy a loan…”
When you have clients that are looking for a new home loan, take time and review a their report first. Set them up to win with you and you’ll receive tons more referrals and glowing thanks and appreciation.
For more information on how to improve your FICO or Credit score feel free to check out http://www.fixmyreport.com/