Skip to main content

Destiny or Fate (Posted May 30, 2016)

There’s absolutely nothing earth-shattering about this week’s edition of our lovely newsletter.  That doesn’t mean you should stop right here and not read it; I’m just helping you set a suitable level of expectations.  Not everything I write can be a literary masterpiece on par with To Kill a Mockingbird or The Lord of the Rings.  I’m only human. 

We’re going to have a little refresher course on debt and how it can BOOST your credit score.  For those of you who are playing at home, you’ll get extra points for neatness and essay-style answers.  Now, let’s look at how four key consumer loans can affect your mortgage worthiness: 

Student loans
Because these tend to take a while to pay off, they can help your credit score if you pay your bills on time – you’re able to establish a history of paying regularly. These loans count into your debt-to-income ratio, so understand they do limit the amount for which you can qualify and borrow until they’re paid off.

Auto loans
These can also raise your score as you’ve demonstrated the ability to diversify the types of debt you can carry.  A big part of the reason these play well into boosting your credit score is that an auto loan is harder to get than a credit card.  Lenders look upon this favorably. 

Payday loans
These don’t usually show on your credit report, but if you default, that could ding your credit.  If certain circumstances have brought you to the point of needing to obtain one of these loans, the most important thing to remember, of course, is to pay it off on schedule or sooner.  Wiping that debt off your plate will help have more cash available for other things.

Existing mortgage loans
Mortgages, when paid on time, are great for your credit score.  Conversely, missed payments on previous mortgages will make your new lender nervous.  Foreclosures, bankruptcies, and the like, obviously, are other concerns that can adversely affect your mortgage worthiness – but you already knew that, right? 

Now that we’re all on the same page, let me ask you just one question:  If your client hasn’t led a perfect “loan” life (as detailed above), do you want them to go to a lender who’s going to “refer” them out to a credit-cleaning service (who will probably charge) or to a lender who KNOWS HOW (free of charge) to help them clean and qualify?  This is not a slam on a credit-cleaning service at all, but they’re in the business to charge for a service – nothing more, nothing less – and that’s the extent of their motivation.  Sure, they want their customers to be happy and have an improved score, but their fee is their ultimate goal. 


Conversely, we have a vested interest not only to show them how to improve their credit score but to help them read and understand a credit report so they can see what needs to be done to – and this is the payoff!! – get that house.  THAT’s our motivation, plain and simple.  So, let me ask the question one more time: do you want a mortgage company that turns this over to a third party, or do you want us working one on one with your client?  Here’s a hint: it’s YOUR paycheck we’re talking about – control your destiny or subject yourself to fate.

Comments

Post a Comment

Popular posts from this blog

Posted August 31, 2015

Fast . . . So They’re Not Furious InSellerate , a lead-generation company, conducted a study that yielded some very interesting insights: •    32% of consumers expect a company to respond to an online inquiry within 30 minutes •    42% of consumers expect contact within one hour •    M ore than half of the companies studied (56.34%) did not respond to the online or email inquiry at all Of those companies that did respond, the average response time exceeded 24 hours, and the primary response vehicle was email, which is a passive, relatively non-effective method of contact .   The take-away thought from all of this is “no kidding”, of course, but it underscores the wisdom that a lead is only as good as the work you put into it. Safety Over Sales According to a USA Today article, realtors in Iowa are taking steps to ensure the safety of all agents. The initiative includes an optional seller contract that prohibits any agent from ...
Post a Comment
Read more

Perspective Produces Progress

Each week I try to write something that will either make you think about a rather humdrum mortgage/real estate topic in a new way or at least clear the cerebral cobwebs.   Admittedly, some weeks I’m better at accomplishing that than others – my apologies for those “off” weeks.   As I’ve been trying to come up with a topic for this week’s missive, it’s not so much that I’ve been hitting a brick wall that’s been keeping me from inspiration, it’s that I’ve felt sort of “dragged down” by so many things that have been happening here in our own backyard over the past few weeks that have been . . . less than inspiring.   It seems that wherever you turn – TV, radio, Facebook, Instagram , newspapers (they still exist) – one party isn’t happy unless the opposing party is proven wrong and/or devastated.   I’m not advocating the philosophy that “everyone’s a winner and should get a trophy just for showing up” – I’m an advocate of just the opposite when it comes to c...
Post a Comment
Read more

The Spooky Truth

Do you have that friend or family member who pronounces a fairly common word incorrectly on a regular basis?   Or, do you know someone who’s pretty intelligent but consistently conjugates one particular verb incorrectly?   I have a friend of almost 20 years when something isn’t quite going his way, he gets “ fustrated ” – this friend is a very successful, college-educated professional who works with executives at the C level every day.   In the conjugation department, I have a relative who constantly says “I seen that” – I’m not sure if he knows that the word “saw” isn’t just something you use to cut through a log or plank.   The next time you find yourself in a discussion with a handful of people, watch for the use of the word “impact” and listen to the way it’s being used.   I’m willing to bet you’ll hear this phrase: “I was impacted by . . .”   Until relatively recently, the “translation” of that phrase would have meant that the person was, li...
Post a Comment
Read more