Alex Carlucci The Mortgage Expert,
Publish On: July 8, 2022
In this blog, we will be covering the HUD and Fannie Mae Guidelines on credit disputes during the mortgage process. We will go over the main key bullet points on the most recent updated HUD and Fannie Mae guidelines on credit disputes. Credit disputes are when a consumer looks at his or her credit report and sees errors on their credit report that should not be there. The three giant credit reporting agencies, Experian, Equifax, and Transunion are known to make mistakes. It is recommended that all consumers check their credit reports at least once a year. In the following paragraphs, we will be discussing HUD and Fannie Mae Guidelines on credit disputes during the mortgage process.
How Can I Get a Free Mortgage FICO Score?
By federal law, you are allowed to receive a copy of your consumer credit report from each of the credit reporting agencies by visiting annualcreditreport.com. It is recommended that you stage the request and not order them all at once. This way you get one credit report every four months so you can review your credit report three types a year www.annualcreditreport.com will not provide you your credit score unless you pay a fee. Your credit report will be provided for you free of charge. In this blog, we will discuss HUD And Fannie Mae Guidelines On Credit Disputes.. There are other credit services such as Credit Karma and Equifax.com where for a monthly subscription fee, you can gain access to your credit report and these companies will notify you if there are any changes in your credit report or credit scores.
How Does My Credit Score Affect Getting a Mortgage?
If you apply for a mortgage, the loan officer will ask you to complete an application and will run your credit. Your mortgage broker will review your application as to your assets and income and debts you listed and match it with your tri-merge credit report. One of the things the loan officer will look at is your credit history, especially your payment history for the last 12 months. Most mortgage companies do not allow any 30-day late payments in the past 12 months. When reviewing a mortgage loan applicant’s credit report, the mortgage broker will look at prior bankruptcies, judgments, foreclosures, short sales, deed in lieu of foreclosure, and credit disputes. We will cover more on credit disputes in a later paragraph.
Do Mortgage Rates Depend on Your Credit Scores?
A borrower’s credit score is one of the most important factors that determine mortgage rates on all types of mortgages. Credit scores are extremely important and credit scores are what determine whether the borrower qualifies for FHA, Conventional, VA, USDA, Jumbo, portfolio, Non-QM Loans, and other loan programs. Credit scores can fluctuate greatly from month to month and can easily be maneuvered by a loan officer. For example, if your credit score is 570 FICO and you need a 580 FICO credit score to qualify for a 3.5% down payment FHA loan, there may be quick fixes to remedy this problem. Paying down your credit cards is probably the fastest and easiest fix to boost one’s credit scores.
Can You Get a Mortgage With Disputes on Your Credit Report?
Credit disputes during the mortgage process can be a deal killer. Fannie Mae and Freddie Mac do not allow any credit disputes during the mortgage approval process. The mortgage process will be in suspense until the credit disputes are retracted by the borrower. With FHA, all medical credit disputes are exempted and so are medical collections. With non-medical credit disputes, as long as the aggregate dollar amount is less than $1,000, then the credit disputes are exempted. If the aggregate credit disputes are greater than $1,000, then the credit disputes need to be retracted and a new credit report needs to be pulled reflecting the disputes.
Can Removing Disputes Lower Credit Scores?
When you retract credit disputes, be prepared to see your credit scores drop. Sometimes retracting a credit dispute with a credit balance can drop a consumer’s credit scores by more than 50 plus points. Prior to applying for a mortgage loan, please consult with a mortgage broker and go over your credit report and credit scores. You should really have your credit disputes removed before you put an offer in on a home.
This guide on HUD And Fannie Mae Guidelines On Credit Disputes was updated on July 8th, 2022.
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