Credit Scores and Mortgage Rates

Credit Requirements for Mortgage

What are the credit requirements for mortgage

There are many credit requirements when a mortgage loan borrower decides in applying for a mortgage.  One of those requirements that the majority of the mortgage lenders require is that the borrower has certain credit requirements.  Some of those credit requirements might be a minimum credit score, no delinquencies in the past 12 to 24 months, certain debt to income ratios, and at least three credit tradelines that has been paid timely for the past twelve months.  How about for those borrowers who do not have three credit tradelines? By tradelines, we mean three creditors such as credit cards, automobile loans, installment loans, and mortgage loans that report to the three major credit reporting agencies: Transunion, Experian, and Equifax.

Tradelines are credit requirements for mortgage

For those California, Illinois, and Florida mortgage loan borrowers who do not have three tradelines, I have a few mortgage lenders who can waive the three tradeline credit requirements.  However, we will require a nontraditional credit tradeline requirement such as rent payments, cell phone payments, and/or utility payment.  Whenever you pay for rent or utilities, please pay for it with a check because the mortgage lender may require you to provide copies of cancelled checks when verifying your credit requirements.

Credit Tradelines

If you choose a mortgage lender that requires three credit tradelines as part of their underwriting credit requirements, you might be in a little bit of a jam.  It is not a matter of getting three secured credit cards right away.  Mortgage lenders will require you to have the three credit cards for a least one year with no late payments.  If you are in a hurry to purchase a home but do not have three credit tradelines with a year of seasoning, contact me if you are intending of buying a home in Illinois or Florida.  If you are purchasing a home in another state, contact me and I might be able to refer you over to a mortgage broker in your particular state who specialize in unique mortgage loan programs like myself.

Active tradelines as credit requirements for mortgage

In the meantime, whether you plan on buying a home or not, it is strongly recommended that you establish your credit by having three credit tradelines.  If your credit is not all that good, try to get 3 secured credit cards and start establishing your credit that way.  If you are timely with your three secured credit cards, you should be able to qualify to get unsecured credit cards after 6 months to a year.  If you need a vehicle and have the cash to pay for it all at once, see if you can put half down and finance the other half so you can establish an automobile credit tradeline.  Make sure you make all of your monthly payments on time.  If you have any questions, do not hesitate to contact me at www.gustancho.com .

Gustan Cho NMLS ID 873293

Related> Improving credit scores to qualify for mortgage

Related> FHA minimum credit score guidelines

Related> FHA minimum credit score guidelines for 2015

 

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Comments are closed.