Need a Real Estate Loan? Mortgage Credit Requirements Not the Same as Auto Financing

Qualifying for a existent estate purchase necessitates different credit than auto funding or credit cards. In fact, you may be able to travel out and purchase a new car today, but you might be turned down for a home mortgage. On the other hand, you could travel out and purchase a house and be turned down for an auto loan.

Perhaps you recently applied for a line of credit and were told that your credit score was excellent. When you apply for an auto loan or a consumer credit card, the scoring theoretical account calculates a different credit score than when a mortgage lender runs your credit. Your credit scores differ for different types of loans. Plus, mortgage lenders run all three credit reports and usually take your center score as their footing for your loan requirements.

However, some mortgage companies, especially non-prime lenders, will utilize your highest credit score. For a mortgage refinance, some lenders don't even run a new credit report if all your mortgage payments were made on time. They utilize the credit score from when you first applied with them.

Besides your credit score, mortgage lenders see your debt-to-income ratio and other credit matters, unlike other types of credit grantors. Your debt-to-income ratio is the comparison of mortgage payment, including taxes, interest, and insurance to your sum gross monthly income.

Real estate lenders also consider:

Your education
Your income
Your employment qualifications
Your overall monthly debt payments

Understanding the difference between good credit and the credit needed for existent estate mortgages assists you refinance your mortgage or purchase your dreaming home.

Copyright © 2005 Jeanette J. Fisher All Rights Reserved.