Know Your Credit Rating

Lori Dwyer - Mortgage Consultant -Ocotillo Mortgage

Contrary to what is being portrayed in the news, now is a great time to purchase your first home. The interest rates for 30 year fixed rate mortgages are dropping daily. The government continues to back 100% financing for qualified borrowers up to $417,000. The biggest deterrent for most people trying to qualify for these loans is their credit score. There are 3 major bureaus that report your payment history and a FICO score is generated from each bureau. Lenders use the middle score as an indicator to determine whether or not you are likely to repay the loan. You must have a 620 mid-score for most lenders to be eligible for 100% financing. I see errors on the majority of credit reports that I pull. If you have not checked your credit lately, I would recommend going to Annual Credit Report.com to receive a free report. All Arizona residents are entitled to one free report per year. I do not recommend paying the extra money to see your FICO score, as they are never the same as when your lender pulls your credit. What you will be able to see on the credit report is your open and closed accounts, payment history and current balance. Look for anything that is not yours, has been paid late or has been sent to collections. Often times, an old medical bill that should of been paid by your insurance never gets paid and is sent to collections without your knowledge. On the website, you have the ability to dispute anything you feel is not reporting correctly. If you can correct these problems now, it will save you time and money when you decide to purchase your new home!