Credit Questions

Q & A: About Credit
What factors affect a Loan Approval?

Most lenders base their decision on three factors: credit, capacity and collateral. Credit refers to the quality of your current credit rating. Capacity is your ability to repay the loan based on job stability, current income and other factors. Collateral is the amount of equity in your home and the likelihood of appreciation.

Should I Pre-Qualify before I begin searching for a home?

Real Estate Agents and home sellers will generally consider you a more serious buyer if you receive a pre-qualify from a reliable mortgage company like UAMC. Not only does pre-qualifying allow you to narrow your price range, it also assures the seller that you are already pre-qualified to buy the home of your dreams.

What are Discount Points?

A discount point is a fee that you can pay to reduce your interest rate. One “point” equals 1% of the loan amount. For example, one point on a $100,000 loan is $1,000.

Do I have a choice of points or no points? How do I determine whether or not to pay points?

Yes, you do have a choice. The primary idea of points is to pay a fee at closing in order to lower your interest rate. Depending upon how long you keep your loan, you may save substantially more money over the life of the loan if you choose to do so. If you would like to lower your monthly payments by lowering your interest rate, then paying points up front may be the best way to accomplish this. If you’re going to be in your home for a relatively short period, it may not be worth it to pay discount points.

Will one late credit card payment or loan default disqualify me from getting a mortgage?

If you have less than perfect credit, Better Built Homes has programs to meet your needs. Late payments should not automatically disqualify you from getting a mortgage. Better Built Homes understands that almost everyone has forgotten to pay a bill on time, or has had trouble making a payment. Many people find themselves in difficult financial situations as a result of various situations, including illness, divorce, or temporary unemployment. If you can demonstrate that a payment problem is in the past, and you have been able to reestablish a good track record for a sufficient amount of time, you may be in a good position to get a mortgage. If you feel there is a reasonable explanation for your personal situation, speak to Better Built Homes honestly and openly about the situation. It’s important to remember that lenders don’t just look at your past history, but also at your ability and willingness to pay in the future.

“Building a better home means going beyond your expectations.”