How Credit Impacts Home Mortgage Loans
When applying for a mortgage loan, one wants to make sure that you have the best possible credit score. Your credit has a great impact on your loan. Your credit profile will affect the home loan interest rate, your ability to qualify for the mortgage loan, and the type of home loan program you can apply for.click here for more info
Since your credit plays an important role in the home mortgage loan process, it is important to understand the relationship between credit and the home loan qualification process. It is also important to know what you can do in order to have the best possible credit profile and score before applying for a mortgage loan.
Bankruptcy and Foreclosures
Bankruptcy and foreclosures are two major negative items on a credit report that can greatly impact the loan decision. On bankruptcy, depending on whether it is Chapter 7 or 13 bankruptcy, one might have to wait 2-4 years before the mortgage will be approved. FHA home loans allow a homebuyer to qualify with a bankruptcy if the bankruptcy has been discharged for at least two years. Clients with a bankruptcy on their credit report must also reestablished their credit with positive trade lines (new accounts) and have no new negative credit reporting to the bureaus since the bankruptcy was filed.