Veteran Loans Under 620 Credit Score

Veteran Loans with a credit score under 620?

original article posted at www.woodbridgemortgagenews.com

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Roadmap to Good Credit

In late August 2010, Mr.Buyer was referred to me by an agent to get pre approved.  But this was not a ready to go client. We provided the client a detailed roadmap to

get mortgage ready in the next six months.

Many times we do this (you know give the buyer a chance to participate in their own rescue), but when we check-in a couple months later via phone the buyers have not done anything to change their situation.        

     

Well this client was different he did everything we asked and had greatly improved his credit score

as a result. So finally in early March of this year we were able to issue a Mortgage Pre-Approval Letter to start shopping for homes with a Veteran Home Loan.

I asked the buyer if he was going to work with the Agent that originally referred him and he decided not to. According to the buyer, the agent did not keep in touch and one of his friends had a great experience with another Realtor that he wanted to work with as well.

I immediately asked for the Agent's information since we had never worked together, I sent him an email and left a voice mail to introduce myself and let him know I would be working diligently on the team. As a lender I am aware that you, Mr. or Ms. Agent, are putting the biggest part of the transaction in my hands. So I try to communicate quickly with agents that I have never worked with to start establishing a working relationship.

After house hunting and receiving an accepted offer from the seller with my pre-approval letter, the agent goes on to explain to the buyer he feels he would be better off with his lender. The buyer called me and asked why his Realtor would state that and I told him because most people like to do business with people they know, like and trust. And rightfully so, at this time I am none of those to your Realtor.

I then call and leave another voicemail for the agent to let him know that we are going to do the best job for Mr. H, and that he can count on me to get the loan to closing and to communicate throughout the process.

Shortly after the signed contract addendums returned from the bank, the agent sends the client rate quotes via email from his preferred guy and pressures the client again to go with his lender. At this point I am not to happy with the way this transaction is starting, so I call the agent yet again and politely ask what he needs from us to move forward with confidence . He goes on to give me some speech about doing the best for the buyer. But the buyer has clearly stated, to me anyway, he is very pleased with our services and sees no need to switch lenders.

Anyway, after providing two good faith estimates with the buyers rate lock options, Mr. Realtor again tells the buyer he could get a lower rate with his lender and he really thinks he should switch. I am trying at this point not to take this personally, but I was a little frustrated as I knew it was my roadmap to credit recovery, the buyers willingness to take action, and our ability to stay connected that led to the buyer even being able to look at homes with Mr. Realtor, let alone submit a contract.

I placed one more call to the agent to say I appreciate you looking out for the best interest of the client but the information you are giving him is not taking into account this buyer's overall financial scenario. But had you called me back earlier, you would've understood that not only do we have skin in the game but we also are providing a loan to a client who otherwise may not be approved. (Which I am sure made him somewhat uncomfortable, and he probably hears that line all the time.)

I then explained we do VA loans and FHA loans for buyers with less than 620 score ( there are not many lenders that still write these loans) but as a result the interest rate is typically an .125 to .250 higher than market....I am sure some would cry foul on this, but it is what it is. This information had been explained upfront to Mr. H and he was given the opportunity to continue working to raise his credit score above 620 or move forward with buying now. And of course he chose the latter, Mr. H had paid his dues by correcting his past credit mistakes, had great debt to income ratios, and a clean rental history. So sitting on the sidelines was no longer an option, buying at .125 higher rate was still cheaper than renting in his case.

Anyway I politely asked Mr. Realtor, "Will your preferred lender do a VA loan for a buyer with a credit score under 620?" Nope, just as I thought. Even with the added pressure by his agent the buyer did remain loyal and I am very pleased to close the loan.

It's always nice when a plan comes together!

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It Takes Unconventional Measures

Client—“I need to get mortgage approved right away. But my credit score is 590 which is 30 points low according to other lenders.”

Lender—“I have a secret weapon to boost your score. Are you ready to get it done by untraditional measures?”

Client—“Of course, I just need to get this done. What do I have to do?”

Lender—“Okay visit www.getnewcreditline.com and sign up for $5,000 credit limit with $100 balance” the account will boost your score in thirty days or less

Client—“What type of credit line is this?”

Lender—“It’s a merchant account that allows you to buy books online and improve your credit score quickly”

Client—“But I don’t read books. So can I apply for a traditional or secured VISA or Mastercard?”

Lender—“Of course but I thought you wanted to get it done in 45 days or less”

Client—“I do but I would prefer to go with as secured VISA or Mastercard, you know a more reputable source..”

Lender—“Okay, call me back in thirty days to see if the $300 balance from Visa helped boost your score”

Client—“I need this done in 45 days or less. There’s a home I have under contract”

Lender—“Okay but since you don’t read books, and you prefer a Visa or Mastercard with a $300 credit line. I suggest you open the account and call me back to repull credit next month.

Client— (SILENCE)

Lender—“Hello, hello, are you still there?”

Client—“Yes, but I’m not sure about this www.getnewcreditline.com

Lender— Well since you have never heard of merchant accounts before. I need you to do what you “think” is best


The purpose of this post was to show you how we talk ourselves out of moving forward, due to lack of knowledge. I really wish this client did read books but our purpose for using www.getnewcreditline.com is to immediately raise credit scores so you can purchase a home. A home, that pays $8,000 before April 30th, provides excellent tax breaks, and the overall pride of homeownership. Then she can sit at her home and watch TV all day and never read book again in her life…

Quickest Way to Improve Credit Score (w/o paying off one negative item)

If there is one question I’m asked by consumers more than any other question about credit, it is “What is the quickest way to improve my credit score?” My answer is always the same, “how much do you want to raise it?”

If you wish to increase your score from 580 to 620 then your strategy will be very different from someone wanting to go from 670 to 725. Why? Because your starting point is different, it requires a different approach. While the removal of negative items from a report will almost always lead to an increase in score, it’s still a very basic concept at best and typically never leads to the increase score most are seeking.

Believe or not, improving your credit score could be as easy as adding new revolving credit. Of course there are several credit cards available to get you back in “financial trouble” or secured/credit accounts that don’t add any value to your credit score. The most effective tool to increase credit limits and decrease debt to credit ratios (two major factors of credit score) is the use of online merchandise cards or credit lines that report to at least one or more of the three major credit bureaus.

I recommend subprime merchandise cards. Unfortunately this is the most misunderstood card in the industry so most people shy away from use…which is a huge mistake if your goal is to increase your score specifically for the purpose of purchasing a home. The merchandise credit lines typically report high credit limits with low balances and the approval is guaranteed. Sound like a scam…if you say “yes” like everyone else you are missing the point and the opportunity to get out of credit prison. This technique is hard to beat based cost and effectiveness. If you add a secured credit card for the same cost, you do not get the bang for your buck because it will only increase available credit by $300. Which may be okay if your strategy is to raise your credit scores over the next six months versus the next 30 to 60 days, Basically a revolving credit line that reports to two of the three major bureaus, gives you a high credit limit, but it also gives you the security of a “secured card” by allowing only to finance a set amount (keeps you out of trouble) For more information on this secret weapon email me at markita@weststarmortgage.com or visit www.getnewcreditline.com to sign up.

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Markita Aldridge-Woods is a mortgage banker that is passionate about helping clients get out of credit prison. Visit website at www.queenofmortagages.com or call (703) 497-3936.

Improve Your Credit Score Overnight

Improving your credit score does not happen overnight. Many consumers believe there is a quick fix to a situation that did not happen overnight. It is estimated that 60% of all people will have a bruise or blemished credit in the next several years. The rampant foreclosure and job loss has caused a downward swirl in credit portfolios. The first step in improving your credit score is actually obtaining your credit score from all there major credit bureaus. I recommend getting your credit report from a local banker or mortgage professional so you will have the report that financial institutions use to make financing decisions.

Once the tri-merge credit report has been secured the fun part begins. Verify the account information listed, it is estimate that 79% of all reports have some type of errors. If the accounts are numerous and hard to verify consider working with reputable credit repair company to work on your behalf If the accounts are few in number work with the creditors to offer settlements on collections and charged-off accounts. But beware that paying off collection charges on judgment does not increase credit scores dramatically. In order to see a significant boost your credit score you will need several factors working together at the same time –stay tuned for next post that describes a key element in raising your credit score on your own.

Don’t let your credit score keep you in credit prison visit www.queenofmortgages.com for more information. Markita Aldridge-Woods is an expert at helping clients raise credit scores and get the chance they deserve to become homeowners.