Welcome to Episode 1, OMGs Mortgage Lounge. Hello, I am Judy Ogden (nmls #770604), the owner of Ogden Mortgage Group Inc (nmls#2152903). I have been in the mortgage industry for over 40 years and have a high level of knowledge and experience to help you navigate the sea of mortgage loan options. Whether you are looking to purchase or refinance a home, we at Ogden Mortgage Group Inc, specialize in overcoming challenges in the process and educating you on the best plan of action to obtain a loan approval for that dream home.
Now let’s talk about credit: One of the myths out there is that you have to have excellent credit with scores over 650 or even 700 to be able to obtain a loan approval. There are a few loan programs that allow for credit scores to be below that benchmark even down to 585 and in some cases down to a 520.
You can go to Credit Karma for free and download the app to get an idea of your credit scores. It is NOT the same algorithm that is used when applying for a mortgage loan, but it will give you an idea of where your credit scores are, and is a great way to monitor them as you work to improve them.
Some of the ways you can improve your scores are:
1. Get a secured credit card – several companies offer this (Capital One/Wells Fargo/and a company called Current Bank that links your bank acct as a credit acct using direct deposits to increase your scores) You may also check with your local bank or credit union.
2. Do NOT pay off credit cards that you carry monthly – always keep a small balance to keep your usury % active and low.
3. Only use 30% of your credit limit or less -never go above 30% to keep your usury balance % to the limit low.
4. Always pay your credit cards before the due date- on credit cards paying them 1 day late can cause a 30 day late payment report on your credit file.
Some lending tidbits for credit challenges
1. If you have outstanding charge offs (not collections) once they season (# of months after the credit report shows the acct opened) for 24 months there are programs that will allow you to obtain a loan approval WITHOUT paying them off.
2. If your credit score is below 585 but above 520 you may still be eligible for a loan approval with 10% down, which can be a gift from a family member.
3. Deferred Student loans still are considered in your debts for qualifying even if you are not making the payments. You can get an IRP -Income Reduction Repayment Plan that may help lower the monthly debt that has to be included in qualifying
4. Revolving minimum payments are used in the qualifying calculations, not the higher payment that you choose to pay
So, to summarize, do not go out and finance additional debts, don’t go buy a new car/boat etc, don’t allow multiple companies to pull your credit, don’t apply for a mortgage loan to multiple companies.
There’s a lot to this process to be sure, but rest assured OMG will walk you through each step to make sure you understand exactly what you are doing!
