Find out how you can offset the new 2014 mortgage regulations with an excellent credit score!

As of January 10^th, the new mortgage regulations will further restrict debt to income ratios for those purchasing real estate and looking for mortgage financing. These ratios will be reduced which can lead to diminished buyer borrowing power and cause lowered loan amounts offered by banks as well as more rejections. Lenders will become legally liable/open to law suits if they extend financing to those who do not fit into the new regulations and wind up defaulting on loans. According to Compliance Ease, a leading provider of intelligent business solutions to financial services institutions, who did a test trial of the new regulations in 2013, one in five current mortgages would not qualify under the new rules.

With the combination of rates increasing and tighter regulations on financing, buyers will need to prepare their proof of income, debt to income, and the best credit scores possible well in advance if they want to achieve their financing goals.  It is not just about getting loan approval but also qualifying for the right amount of mortgage needed and the best pricing. As a professional, teaching potential clients and referrals about these challenges will cause less disappointment/frustration, more success, and savings of hundreds of thousands of dollars for the real estate transaction or refinance.

With the appropriate income, debt to income ratio, and a credit Fico score above a 740 threshold borrowers can qualify for the best pricing.  This could mean a savings of 1% or more in interest over the life of the loan which could increase the buyer's purchasing power. Saving 1-1.5% in interest on an $800,000 loan comes to over $400 a month in savings and almost $200,000 over the 30 year term of the loan. As you can see having a better credit score is a way for buyers to gain more purchasing power in this highly restricted mortgage environment. To achieve the best credit scores individuals must order, analyze, and improve credit well in advance of loan application.  

Let the credit repair experts at Precision Credit Restoration help you along the path to a brighter financial future.  Let's achieve these goals together.  Please feel free to give us a call for a free consultation at 877-292-0656 or visit our website for our free report which reveals our top secrets on how to sky-rocket your credit scores at www.precisioncreditrestoration.com.  You have nothing to lose and everything to gain!

The Truth About Dispute Statements/Notations On Credit

In the past few years financing rules have become more rigid when it comes to consumer dispute notations on credit. What is a consumer dispute notation?  When a consumer disputes information on credit a dispute note will be placed on the account in question. Initially, when a negative account is disputed it may very well be taken out of the score formula or at least cause increases in credit scores until verification by the creditor and the credit bureau is complete.

This also applies to good accounts that have been disputed. If the account is a positive trade line the pending dispute could have the opposite impact and reduce scores. When the initial verification is complete the account will either be corrected or verified as accurate. At that point the dispute notation will be removed and the account will then be fully factored into the score. If the consumer continues to dispute the account after the initial verification a notation is placed stating the consumer disagrees and disputes the information on the credit report. This can also alter the score.

Most loans will not be approved by a lender or will be kicked into manual underwriting if a consumer dispute notation is pending or unresolved on credit. Lenders are very aware of how these statements can change scores and most have rigid restrictions about what they will accept when approving financing. Most mortgage professionals are aware that a consumer dispute notation can inhibit their ability to get a loan closed but don't really know why.

Lenders want to price loans correctly with the level of risk the borrower reflects. An accurate score prior to pricing and extending financing is their primary concern which is why removing and/or resolving consumer dispute notations on accounts prior to getting a loan is so important.

A high quality credit repair company will explain this to loan officers when they have completed changes to an individuals credit and will remove any dispute notations before giving the applicant approval to begin the mortgage process. Unfortunately, there are many dispute factory type credit repair companies out there and even consumers that randomly dispute information with no strategy or foresight into how these dispute notations will impact the loan application. Mortgage professionals need to make sure the lender will approve financing if they plan on submitting an application with these open statements on credit.  If a loan officer pulls a credit profile and sees consumer dispute notations they should make the applicant aware of the need to have these notations removed or resolved.  In many cases it is quite difficult and confusing for the layman to address these issues on credit.  

Feel free to call us at 877-292-0656 with any credit questions or feedback! 

     

Making sure credit is analyzed with future financial goals in mind is a MUST before taking an action that can foil those plans and limit a consumers options for a better quality financial life.