Can a Mortgage Broker get me a better mortgage rate for less?

Yes, a mortgage broker can usually get you a better mortgage rate for less. Mortgage brokers go to several lenders on your behalf and find the one with the best terms and interest rates. Much like a bank or retail lender loan officer, a mortgage broker will take care of everything on your home financing. A key distinction however is that a mortgage brokers’s role includes comparing loan terms across multiple lenders (we work with over 150) instead of just one (like a bank or retail lender that a loan officer represents) to find applicants the best options, programs, and rates, collecting paperwork the financial institution needs to analyze the application, and guiding the buyer through the underwriting and closing processes. Mortgage brokers can significantly simplify the home buying process.

Can Mortgage Brokers help with Refinancing?

Yes, mortgage brokers absolutely can help with refinancing and getting a better rate and flexible terms whether you have excellent credit or not. A mortgage broker can help you secure a better interest rate than you could get on your own.

How is my credit evaluated by lenders and what credit scores do they use?

What credit score do mortgage brokers use? There are two credit scoring models in the United States: FICO and VantageScore. Mortgage lenders typically prefer to use FICO. However, each credit bureau uses a different version of the FICO score: Experian uses FICO Score 2 Equifax uses FICO Score 5 TransUnion uses FICO Score 4 Credit scores are a system creditors use to help determine whether or not to give you credit. Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score — helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due. The most widely used credit scores are FICO scores, which were developed by Fair Isaac Company, Inc. Your score will fall between 350 (high risk) and 850 (low risk). Because your credit report is an such an important part of many credit scoring systems, it is very important to make sure it’s accurate before you submit a credit application. To get copies of your report, contact the three major credit reporting agencies: Equifax: +1 (800) 685-1111 Experian: +1 (888) 397-3742 Trans Union: +1 (800) 916-8800 You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian, and TransUnion. This free credit report may not contain your credit score and can be requested through the following website: https://www.annualcreditreport.com

What Can I Do To Improve My Credit Score?

Credit scoring models are complex and often vary among creditors and for different types of credit. If one-factor changes, your score may change — but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application. Nevertheless, scoring models generally evaluate the following types of information in your credit report: Have you paid your bills on time? Payment history typically is a significant factor. Your score will likely be affected negatively if you have paid bills late, had an account referred to collections, or declared bankruptcy if that history is reflected on your credit report. What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, that is likely to hurt your score. How long is your credit history? Generally, models consider the length of your credit track record. Insufficient credit history may affect your score, but that can be offset by other factors, such as timely payments and low balances. Have you applied for new credit recently? Many scoring models consider whether you have applied for credit recently by looking at “inquiries” on your credit report when you apply for credit. If you have applied for too many new accounts recently, that may negatively affect your score. However, not all inquiries are counted. Inquiries by creditors who are monitoring your account or looking at credit reports to make “prescreened” credit offers are not counted. How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may hurt your score. Also, many models consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may negatively affect your credit score. Scoring models may be based on more than just information in your credit report. For example, the model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home. To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It’s likely to take some time to improve your score significantly. When we review your credit, it’ll give us a snapshot in time of your scores as they sit today. It will also allow us to see what improvements can be made and what your potential scores could be to build out a roadmap to homeownership. We can run scenarios that will give you a very specific path of what you need to do to maximize your scores or if needed, get you in touch with one of our credit repair partners who are reliable and will act in your best interests to help you get things cleaned up on your credit. Whatever your situation, we can help you improve your situation.

Cederholm Mortgage Advisors: Home Loan Experts in CO

FAQs | Cederholm Mortgage Advisors

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