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The Loan Process begins with an initial consultation between the borrower and the broker. During the first conversation, it is extremely important for the borrower to discuss what they hope to accomplish with their new investment in real estate. It is then the duty of the broker to best determine how to accomplish that goal, with the current qualifications of the borrower. Unfortunately, borrowers often end up in the wrong mortgage product because their lack of communicating what they truly intend to do. Borrowers also must remember to be upfront and truthful with their broker from the start. Remember, the broker acts as the borrower’s representative and structures the loan for presentation to underwriting. They will help their borrower around any weaknesses they may not want to disclose to underwriting. From the conversation the broker will take a written loan application….

After taking a complete application, one of the very first things that the loan agent must do is access the applicant’s credit report. A competent mortgage professional will examine not only the credit scores but do a line by line analysis of the report and highlight any information that could be considered derogatory. Once the report has been examined the Loan Officer will review it with the applicant and get their response to any derogatory information.

After all of the documentation is collected we will send your loan package to underwriting for evaluation. Underwriting will then decide if the proper information has been sent or if they want to see additional information to make a final determination for the mortgage.

From the time the application was taken the broker has 3 days to send you RESPA compliance forms.

An appraisal will be ordered as to support the value of the property. The loan is based off the overall value of the property and is crucial to get the appraisal done right away. Typical time for appraisal vary from area to area depending on demand and market conditions.

The underwriter may ask for additional information on a case by case basis, considered a stipulation of funding.

After deciding on the loan program, the applicant must supply the necessary income and assets documents (W2’s, pay stubs, bank statements, etc.) as required by the chosen loan program. Because these documents are essential to the underwriting process, the application package cannot be submitted without them. Therefore, it is important that the applicant present them without delay.

A type of mortgage lending intended to serve borrowers who do not qualify for prime loans because of credit problems or a limited credit history.

Subprime loans that are over 80% typically don’t require Mortgage Insurance. The risk of default is already calculated in the rate.

Subprime loans are a great tool to get credit challenged borrowers into a home quickly without taking the time to clear up past credit issues. When going into a subprime loan it is often advised to opt for a 2/28 or 3/27 vs. a 30 year fixed. A 2/28 or 3/27 loan is fixed for the first 2 to 3 years then becomes an adjustable rate thereafter and offers a lower rate than the 30 year fixed. This 2 to 3 year time period gives you the time to better your situation enabling you to qualify for a conforming loan with lower rates before the rate becomes adjustable.

What’s in a name? A new term making its way in the mortgage industry in response to the term sub-prime. That new term is non-prime. Some lenders believe that calling a loan category “sub” is demeaning and turns off prospective credit challenged borrowers. The term non-prime suggests a less derogatory connotation and may be more viable as a marketing term.

If you do need to borrow over 80% over your home’s value, let us know and we will compare your total monthly payments with PMI on a prime or Alt-A program and without private mortgage insurance on a low rate subprime program for people with fair credit.

Subprime lenders are great for getting first time home buyers, with or without good credit, into a home. Subprime lenders also help borrowers with excellent credit that have other problems getting financed like, proving income, loan to value etc.

These are mortgages offered that allow for credit problems, higher loan to values, higher cash out amounts, no PMI insurance. They also have looser underwriting guidelines, ignoring charge offs, judgments and collections. Also underwriting turn around times can be much faster. Sub-prime mortgages were designed for those people who don’t fit into the small box that conventional underwriting allows for. With a Sub-prime mortgage you can secure a loan with credit scores as low as 500. Obtain no income verification loans with scores as low as 600. In many cases you can combine your first and second mortgage, secure a lower rate, avoid private mortgage insurance and save hundreds of dollars per month.

Mortgage brokers are usually the only source for subprime loans, as these loans are almost never offered by neighborhood banks. Most mortgage brokers have a network of mortgage banks that offer loan programs for all sorts of unconventional situations.

These types of loans are available to help borrowers with past credit history obtain mortgage financing. They are usually put in an ARM loan, fixed for a couple years so they can begin with a lower rate. This gives them time to work on their credit and ultimately refinance into a loan with better terms

Subprime lending refers to the extension of credit to persons who are considered to be higher-risk borrowers. In lending parlance, their credit ratings are “B” or “C” rather than “A” or “A-”. Lenders typically price subprime loans to borrowers at rates of interest and points and fees slightly higher than conventional loans.

Lenders feel that people who have not handled credit well in the past are at a greater risk of failing to repay their loans. Standard-priced loans are typically made to people with good credit history because their past record proves to lenders that they are at low risk of default.

Subprime lending offers many choices today. You can now get a home loan with credit scores in the 400’s, have late payments, bankruptcies, foreclosures, but all will reflect the interest rate that you will receive.

Subprime lenders are a huge asset to the population of people wanting to purchase homes that don’t fall under normal underwriting guidelines. Many people would not be able to purchase their dream home without Brokers providing these types of loans consequently causing less sales in the market place and a slower economy. Fill out the online form today and get started on your home search.

Loans to borrowers whose credit is less than perfect will almost always be subprime loans. There are also other circumstances that lead to subprime loans, including high outstanding debt, unproven income, etc. Even borrowers with good credit may receive subprime loans for a variety of reason, including lack of verifiable rental history or liquid cash reserve requirements.

One solution if you have a low credit score is to purchase the home with a sub-prime lender and then clean up your credit score. Once the bad credit score is improved then refinance the home with a lower rate.

Especially when borrowing more than 80% of the value of your home, the slightly higher rates which lenders charge borrowers who have less than perfect credit are more than made up for by the savings the borrower receives by not having to pay for Private Mortgage Insurance which would have been required of a borrower with perfect credit.

Do you feel you are a subprime borrower? I can understand how this can be intimidating and I want to thank you for reading the information above. If you would like to continue this conversation than please contact me so you and I can discuss your financial situation. Please read more valuable information and when you feel comfortable I would like you to contact me.

First time home buyers may opt for subprime loans when they have little savings. Typically the asset requirements for subprime loans are not as strict as prime loans.

Common subprime candidate could possibly be Bankruptcy, Foreclosure, or major Credit Card Debt. Consult a Mortgage Professional so they help you obtain a home with little money down even carrying these difficult charges against your personal history.

Subprime is not for just poor credit borrowers. Any time you go over 80% loan to value, you get non prime rates.

The key to getting a sub-prime loan is disclosure. Although you may have been turned down by a bank for a certain incident in your credit history you need to be honest with your mortgage broker and disclose all the possible occurrences in your credit history that may prevent your loan from closing. Mortgage Brokers are experts in finding the right lender to fit your needs. If anything has been omitted the lender will find it and wonder why a broker did not submit the information. Lenders do not like surprises. So, disclose everything, good or bad, from your credit history and let the Mortgage Broker find the right lender for you.

As a rule, lenders offer subprime rates to customers who have credit scores below 620. If your score is higher than that, you should be able to qualify for a better interest rate. If not, you can either accept the higher rates from lenders, or take time to improve your score by paying off some bills or resolve previous collections and charge off’s in a timely manner.

Everyone wants to qualify for loans at the lowest interest rates and with the most favorable conditions, but for those with severely blemished credit reports, the odds of doing so may not be attainable, but there may still be programs available.

A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. For Example: A homeowner, who is facing foreclosure, has an existing mortgage of $300,000 and you have a buyer willing to pay $220,000, you would write up a contract between the buyer and the seller, and fax it to the lender. This could be accepted as full payment of the loan.

Borrowers should be aware that receiving a short sale from the lender will still have a detrimental effect on their credit standing. Most lenders will report the mortgage as “account settled for less than amount due” or some similar type verbiage. Such a reporting will have a derogatory effect on their credit score and may hamper their ability to get a mortgage loan in the future.

Banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can get rid of the property without it being a huge loss, they will do it. Lenders know that they could loose a lot more money if it were to go to auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.

Sometimes this is the only way out for a home owner rather than the home going to foreclosure. Chances are you may have to wait a few months before obtaining a mortgage but with today’s Subprime lenders just about anyone can get a mortgage.

Other sites: Loan Officer | Delinquency | How To Choose A Real Estate Agent | VA| Pay Option Arm Calculator

If your mortgage has been denied, there are many reasons why. Here are some of the most common reasons.

You could be denied because of residency status. While some lenders will not lend to you if you are not a US citizen, there are other lenders who will. Also if you are unable to produce sufficient documentation for your income and have lower credit scores you might be denied without the possibility of a stated income program.

Your loan could be denied if you did not provide accurate information during the initial loan application. Underwriters verify nearly all information so you may as well provide accurate info up front!

Sometimes applications have been denied because the loan officer did not ask for the proper information or submitted too much information (ex Submitting a W-2 on a stated income deal). If your mortgage application has been denied please call and we may have a program for you.

A mortgage application can be denied if the property being bought is not acceptable on the secondary market. For instance, a condominium or cooperative project that is not Fannie Mae eligible, or a house that, based on the survey, has a part of a structure built on a neighbor’s land. While no banks would lend on a property with title or survey issues, some lenders thrive on making mortgage financing available to condos and coops that are non-conforming.

Your loan could be denied if you have not been in the same line of work over the past two years. Your loan could also be denied if you have huge gaps when switching jobs.

Your mortgage can be denied for many credit reasons. Your credit score may not fit the guidelines of the program that you are trying to qualify for. You may have too much derogatory credit listed on your credit report or you may have open collection accounts that you are unable to pay and the lender requires them to be paid to obtain the loan you are looking for. Lack of credit tradelines or lack of a credit history are other big credit reasons as to why people are denied a loan. Credit tradelines are open credit accounts reporting on your credit report. If you do not have enough open active tradelines a underwriter may not have enough information to make a decision on whether you are credit worthy of obtaining a loan from them.

Your loan can be denied because income is not sufficient to support the monthly payments according to the lender guidelines.

Loans are sometimes denied because of things that happen after the application is taken. Some of the more common are:

• termination of employment, such as quitting a job to find one closer to the new home, or getting fired for missing too much work while planning the big move to the new home
• increased debt, such as buying things on credit to go in or with the new home, like furniture or a new car, or spending that anticipated refinance money a little early
• late payments, because the borrowers assumes they can make the payment after their refinance closes or the refinance will pay it off.

Lenders are required to send you a form stating the reason for your loan denial.

Other sites: Mortgage Broker | VA | Stated Income Loan | Closing Costs | Fixed-rate mortgage | Why should I refinance | MIP | Protect Yourself from the Real Estate Bubble | Selling your home with a real estate agent | FSBO| Pay Option Arm Calculator

Are you looking for a mortgage and have bad credit. If you or someone you know have had events in the past that have caused your credit scores to drop - there is hope even if you’ve been turned down by banks.

There are more mortgage loan programs available now for borrowers with bad credit than ever before in history. Even the popular Option Arm programs are often available to homeowners with some derogatory credit.

When you get a new mortgage with bad credit, remember to take a long term outlook on it, this bad credit mortgage is your first step toward rebuilding credit and razing your credit score. If possible, use this mortgage to pay off your credit cards, personal loans and other debts and to rebuild your credit by paying the mortgage payment like clockwork every single month. In as little as 1 year your credit scores will have improved, and in 2 to 3 years you can plan on refinancing again to take advantage of your now dramatically higher credit score.

Bad Credit Mortgages have been modified during the recent mortgage meltdown. Programs that were available during the refi-boom may no longer be available. Please speak to a mortgage professional regarding your situation.

There are loan programs available that will ignore derogatory credit such as collections, judgments, charge offs. Get in touch with us to see if you qualify, you may be surprised at some of the programs available. Stop throwing your money away on rent and see if you qualify for a mortgage loan today!

Lenders commonly use three criteria to underwrite a mortgage application; credit, income, and assets. If a loan applicant’s has poor credit history, he can get home financing as long as his other two qualifications are good. If the home buyer’s income and assets situations are not as strong as they should be, there are sub-prime banks that specialize in bad credit mortgages, although such poor credit mortgages often carry higher interest rates.

If for some reason you still are turned down for home financing with bad credit there is still hope! Your mortgage broker should be able to refer you to a good credit repair program. Many times these programs can help you improve your credit score in a in short amount of time.

A qualified mortgage professional can help you get approved for a loan even if you have poor credit. Many people who think they have poor credit can still qualify for some traditional conforming loans. Those who do have more serious credit problems still have many options available through sub-prime and niche lenders.

In the past mortgage programs were only available through banks with 20% down and you needed to have a good credit rating. Along with that your DTI or debt to income ratio needed to be around 41% or below to qualify. With the lenders that are now considered Sub-prime or Non-prime you can get a loan one day out of bankruptcy, with up to a 55% DTI or even if you have multiple lates on your credit report. The guidelines are different for each lender and program.

The process of separating assets after a divorce is tedious. However refinancing coupled with a Quit Claim Deed, allows you to remove one spouse from the loan and deed of trust.

A stay-at-home mother going through a divorce process and has no proof of income can often obtain a No Income refinance loan to pay off the ex-husband for his interest in the property. If the stay-at-home mother knows the amount of future alimony, she may use a Stated Income loan to refinance the home to get a lower interest rate.

Often, divorcees do not agree on how to divide their respective equity in the home, so instead of resorting to selling the home, the parties may agree that one party may take a cash out refinance against the property to buy out the other party in the divorce.

This is usually accomplished with a Cash-Out Refinance, since the spouse that is remaining in the property will need to compensate the spouse that is leaving for their ownership interest in the property. What that ownership interest amounts to is often negotiated as part of the Divorce Decree.

The spouse that will be remaining in the house, after the divorce, will still need to qualify for the new loan on their own. This is why it is important that your mortgage broker have so many different types of loan programs.

One of the reasons it is important to refinance a property after a divorce is this. The co borrower that signs a Quit Claim Deed will have his/her interest in the property removed but the QC Deed does not always remove that person from the credit obligation of being a borrower on the loan. Example: John and Mary divorced and John signed a QC Deed to remove himself from title on the property. The property was not refinanced and both John and Mary were still listed as co borrowers on the loan. Mary did not keep up with the payments and the property went in foreclosure. The lender has just as much right to hold John responsible for the defaulted debt because he was still a co borrower on the loan. The lender can post derogatory credit information about John and even sue John for the money owed.

You have the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file. When a credit reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a “reasonable period of time,” unless it believes the dispute is “frivolous or irrelevant.” If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. If an item is incomplete, the credit reporting agency must complete it.

Don’t Ignore the Problem. If you just hope the problem of errors on your credit history will disappear, then be prepared to wait a long time. Credit information can remain on your report for as long as seven years and up to ten years in cases of bankruptcy.

The credit agencies update every 30 days. If you Dispute an account on your credit report, the agency is obligated to respond to your request with in 30 days. With accurate proof of a faulty account, you will be able to remove that from your credit report

You are allowed a copy of your credit once a year from each credit bureau. Along with your credit report will be a dispute form.

If there is incorrect information on your credit report such as a payment that was reported late that should not have we will be able to correct the information within 3-5 days by going directly through the 3 major credit bureaus and get a rescore to reflect what your credit score should be.

If you are unable to spend the time to write the letters yourself then you might want to hire a credit repair company to do this for you. They will act on your behalf to write the necessary letters to the 3 credit bureaus. There are many companies to choose from these days and it might be in your best interest to consult with your Mortgage Broker as to which company will give you the best service.

The best thing to do to keep an eye on your credit report is to join a Credit Monitoring service such as PrivacyGuard.com they even provide a $1 trial for 2 months. You get all three credit reports with the scores included.

Improving your credit score can be as simple as spreading a large amount of debt on one credit card, over three or four different credit cards.

Prior to applying for a mortgage fixing all credit report errors will optimize your chances of obtain the best financing terms available.

If you find an error, the Fair Credit Reporting Act requires credit bureaus and organizations that provide information to them to correct the mistake. But you have to get the ball rolling by requesting an investigation.

Under The Fair Credit Reporting Act effective October 1, 1997, a credit reporting agency has 5 days from the date of receipt of a written investigation request to contact the appropriate credit grantor about investigation the complaint(s) and receive a reply back within 30 days of the original notification date. Within 5 business days after the completion of the investigation, the credit bureau (i.e.: Equifax, Trans Union, Experian) must send a written report to the consumer with its findings with a copy of the revised report if there were nay changes made.

If a credit bureau can not verify that a disputed item is correct as reported, it must modify or remove it from the consumers’ file. If the tradeline confirms a later date that the information was indeed correct, the credit bureau will add the information back into the consumers’ file. It will notify the consumer in writing as to the changes, within 5 days of the change.

DO NOT expect information to be deleted just because a collection account or debt has been paid. Derogatory items will remain on your report for 7 years. The 7 year clock on a derogatory item falling off your report does not start until the item has been satisfied.

The consumer must write a letter of dispute regarding the erroneous information reported by a specific credit reporting agency. The letter must reference; Your full name, Address, Social Security number, the tradeline Account numbers, Brief statement of what is incorrect. Copies of supporting documents (if any) The letter MUST be sent by overnight mail, with return receipt requested. This verifies when the 30 day clock starts ticking.

When disputing questionable items in a credit report, always remember to dispute with all three major credit bureau agencies. When applying for a mortgage, all lenders look at items reported by all three credit bureaus.

Make sure to keep the “acknowledgment” letters that the bureaus send to you at about 2 weeks. There is a date they have officially acknowledged they received your letters in which the 30 days in the FCRA should start.

Rapid rescoring services are an effective, legitimate ampersand growing sector of the consumer credit industry. The good news is that they work. But you can’t use these services directly. Companies that offer rapid rescoring work directly with mortgage lenders and brokers, not with consumers. If you are serious about fixing errors on your credit report, contact your mortgage broker or lender and talk to them about credit repair today.

The credit bureaus are not government run agencies, but are for profit, multi billion dollar industries that make money off of selling your personal information. It is proven that they make more money off of you with bad credit, rather than good credit, so don’t believe everything that they tell you in results you receive back. Make sure to spend time, in detail, looking at your results and ensuring things like the date of verification have the current date. 50% of Trans Union’s verified accounts have old verification dates, which means they never investigated that account, yet put verified as a result anyway.

It is up to the consumer to keep a close watch on their credit. You are allotted one free report a year. But checking your credit once a year is not enough. Experts recommend that you check your credit report before you go out looking for a loan. That means before buying that car or refinancing your home. Also, just as a rule of thumb, you should check your credit at least twice a year in addition to the times listed above. If you are not shopping for any loans, it would still be wise to check your credit every four months. Be sure to utilize the one free report from each of the credit scoring bureaus.

If a creditor verifies a previously deleted item after the 30 day window, they can add it back on. A notice of this Reinsertion must be sent the consumer within 5 days.

The “30 day rule” is a credit repair myth and is not used by knowledgeable credit repair companies or consumers. This 30 day rule only causes reinsertions if not used properly. If the bureau is forced to delete an item at day 31, then most likely most of those accounts will reappear later, with proper reinsertion notification. The very next line in the FCRA states that if the creditor or credit bureau verifies an account late, or after the 30 day timeline, they can simply add it back on.

Your credit picture is very important and should be kept up the entire time. Do not wait until the last minute (I.E. you want to apply for a mortgage next month). Credit repair is a process and you should allow appropriate time to remove items from the bureaus

Credit reporting is an imperfect system and there are times when you’re credit is tainted and it’s not your fault. Equifax, Experian, and Trans Union don’t always report the same information.

Failure of a borrower to make timely mortgage payments under a loan agreement.

Borrowers with a delinquent mortgage will generally have a higher interest rate than those who are not delinquent. Credit scores also play an important factor in this.

Different types of delinquency will affect your score in different ways. A late payment on your mortgage is the most damaging.

Your credit report will reflect these late payments, using the standard symbols listed below, to read the late payment history. i.e.: R2 would show a revolving (credit card) debt, that has been past due more then 30 days. O = Open (entire balance due each month) R = Revolving (amount due can change each month)I = Installment (fixed amount due each month)0 = Approved, but account is too new to rate or not yet used 1 = Paid as agreed 2 = 30 or more days past due 3 = 60 or more days past due 4 = 90 or more days past due 5 = 120 or more days past due or is a collection account7 = Making regular payments under a wage earner plan or other repayment arrangement8 = Repossession9 = Charged off account

Having delinquencies on any loan will decrease your credit score, and will make it more difficult for you to obtain financing for your home.

If you know that your credit report contains delinquencies which are incorrect or are not attributed to you personally, please tell one of our loan specialists about the situation so that we may assist you in removing the delinquencies and qualifying for the loan program you truly deserve.

Your delinquency will have a major impact on your credit scores. The more recent the delinquency, the more your scores will drop.

A delinquency on a mortgage loan will be considered a greater derogatory factor than a delinquency on unsecured credit by a mortgage loan underwriter. For this reason, homeowners would be advised to do everything possible to try and make their mortgage payments on time.

Delinquency is when you fail to make mortgage payments, when they are due. For most mortgages, payments are due on the 1st day of the month. Even though they might not charge a “late fee” right away, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more credit bureaus.

Delinquencies are also known as “lates.” On your mortgage they are reflected in days 30, 60, 90, or 120. A 120 day late is also considered foreclosure, in the eyes of any lender.

If you ever get seriously behind in your mortgage payments and feel foreclosure looming be especially wary of companies offering assistance. Often these are scam-artists who swindle thousand’s from unknowing homeowners, sometimes leaving them penniless and homeless.

Most lenders consider a loan to be delinquent when payments on the loan are 30 to 60 days past due.

Most lending banks will overlook delinquencies if the homeowner can satisfactorily explain the cause of the delinquencies and the unlikelihood of recurring. Acceptable causes include divorce, separation, tragedy in the family, loss in the mail caused by relocation, etc. Homeowners are often required to supply supporting documents.

If you find yourself in a situation where you might not be able to make all of you monthly obligations you want to make sure that you make your house payment in time as to not be 30 days late. A 30 day late on your house payment can hinder you from qualifying for a mortgage more so than a 30 day late on a credit card.

There are many lenders that will finance you even if you are delinquent.

Other sites: Mortgage Broker | Conforming Loans | FSBO | Mortgage banker | 1003 The Loan Application | New Credit Card Minimum Payments | AZ Mortgage Source | Delinquency | The Lending Process | Reasons Loan Applications Are Rejected | CCRs | Fixed-rate mortgage | VA | Consolidating Credit Card Debt into Your Mortgage| Pay Option Arm Calculator

Frequently asked questions on collections:

Q: Can I still get a home mortgage loan with open collections showing on my credit?

A: Yes you can

Q: How do I get these collections removed from my credit?

A: Accurate negative items reported on your credit can be reported on your credit for 7 years.

Q: How come only some collections report to my credit record?

A: Each creditor, collection agent, lender, etc… can choose to report items to your credit report or not. Some will report not report to any credit repositories, some to only 1 credit repository, some will report to 2 repositories, and some will report to all 3.

Q: Do medical collections negatively affect my credit score?

A: All collections can negatively impact your credit score.

Q: I have heard paying off collections is worse than letting them be so is it better to pay off the collections or should I just leave them alone?

A: This is a very tricky situation and should be approached on a case by case situation. While you should always pay off true debts that you owe money for, sometimes it may be better to wait until after you have obtained financing for a home and sometimes you may need to pay collections off beforehand. Please consult a mortgage professional to find out what will help you most right now and to map out a financial plan.

Q: I cant afford to pay the collections off, what can I do?

A: You can call your collection companies and see if you can get them to lower the amount owed. This is very common and is highly recommended before paying off any collection. Many collection agents will bargain with you and some may even go down to 50% of the original balance. These questions are just a small sampling of some of the questions that are asked everyday by homeowners and people looking to buy their first home. Please contact your personal mortgage advisor today to find out more information about credit, collections and financial planning.

It is important to note that when you contact a collection agency and barter down a payoff amount that it will show on your credit report as “settled less than amount owed”. If an account has just gone into collections, try contacting the original creditor and paying them directly. You may be able to negotiate fees and finance charges being “removed” and then paying the debt in its entirety. Make sure you get a letter from the creditor stating the debt has been paid in full.

Not only will your mortgage advisor have answers and resources available to answer any questions, they will also have trusted relationships to recommend for your home purchase, your credit issues and your over-all financial goals.

Not all collection accounts need to be paid off. In many cases when buying a home or refinancing, the only items that need to be paid off or addressed are those items that appear on title. This is not a conforming guideline, but nonetheless is a loop-hole around having to pay them off at the time of buying or refinancing your home.

Repairing your credit, or restoring as some like to put it, is best done by a professional company. Your mortgage broker will refer you to a reputable company that can remove items like collections from your credit file. As a general rule, if it can go on your credit, it can come off too. The 7 year rule is only the maximum amount of time a derogatory can stay on your credit file.

Most subprime and Alt-A lenders will ignore open medical collections completely. Also most of these aggressive lenders will over look a certain dollar amount of collections that were opened in the last 12 months. And most collections older then 24 months will be ignored by most subprime and Alt-A lenders.

Some lenders allow all collections, judgments etc to stay open, as long as your score meets the criteria. If you have re-established credit and have a score in the upper 500’s, you can still qualify for 100% financing while having open, old collections. Contact us now to have a broker analyze your situation .

The new allowable limits for collections on your credit report is $5000. If your credit report show $5000 or less you may not have to pay them off. If it is over the $5000 then all of the collections will need to be paid. If you are receiving a non conforming/subprime loan the guidelines vary greatly and you may not have to pay any off.

It is also important to keep in mind that updating credit reports can take some time. Even if you paid all your collections today, it could still take 30-45 days before this reflected on your credit report. The most important thing is to get every interaction with your creditors in writing. If your arrangements are not in writing, they may not mean anything.

A mortgage for a very stable borrower with excellent employment and credit history. These are sometimes called “vanilla loans” because the meet general mortgage guidelines and are easy to complete.

This type of loan/borrower often qualifies for the most attractive rates available. A credit score of 720+ is one of most important criteria in establishing a “A” rating.

A credit is a very loose term that applies to basically just having good credit with a good score. You can have perfect credit, no lates ever, no collections and no derogatory credit ever and still have a low credit score and not are considered “A” credit. There may be many reasons for this low score. You may be maxed out on all of your revolving credit (credit cards and such) and have a lot of inquiries. These two items can negatively affect your score and remove you from the A credit classification.

When shopping for an “A” paper credit loan, it is important to remember that this does not necessarily guarantee a low rate. Adjustments will be made to an interest rate for such factors of; Cash-out of equity, Self-employment, Income ratios, Loan to Value ratios, Region/location, encase your mortgage professional about what adjustments will affect your interest rate and payment.

“A” paper loans are for borrowers with good credit and work history. “A” paper loans conform to standards set by Fannie Mae and/or Freddie Mac. loans are for borrowers with good credit and work history that do not conform to standards set by Fannie Mae and/or Freddie Mac are called “Alt-A” loans.

A paper loans are also commonly referred to as conforming loans because they conform to standards set by Fannie Mae and/or Freddie Mac.

Other sites: Broker Outpost | Home Page Sample | MIP | Increasing your homes value | Selling your home with a real estate agent | Why choose a mortgage Broker| Pay Option Arm Calculator

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