7
   

Establishing credit in order to invest in real estate

 
 
Linkat
 
  1  
Reply Fri 13 Feb, 2009 12:03 pm
@Slappy Doo Hoo,
And different lenders look at things differently. A big bank like Wells Fargo will look at things differently than say a small credit union.

Also, does the lender "sell" out loans or keep them in house? There are more requirements that must be met to bigger mortgage companies and banks as they tend to "sell" the loans (that is why you see these bulk investments of FNMAs and GNMAs). Smaller places like credit unions more often keep their loans in house and therfore they do not have to meet the same requirements.

I've taken a credit counseling course about building credit and I've also talked with a bunch of different lenders in the past the year.
0 Replies
 
Linkat
 
  1  
Reply Fri 13 Feb, 2009 12:07 pm
One other thing - do not go to a bunch of different mortgage companies/banks/etc and ask each to get pre-approved. Do not let them run a history check on you; the more credit checks on you, the lower your credit score becomes. Instead run your own - I believe you can get it once a year without any charge. Print it out and take it with you - many will give you quotes and/or initial approval without running it themself (we did this) - of course once you commit, they will have to run it themselves.
cicerone imposter
 
  1  
Reply Fri 13 Feb, 2009 02:35 pm
@Linkat,
I believe that will be out of the question anywhos, because many charge "processing fees."
Linkat
 
  1  
Reply Fri 13 Feb, 2009 03:03 pm
@cicerone imposter,
Do you mean getting your credit rating? No there is no processing fee for the first one each year. Legally you can run your own report without any fee - I know first hand as I hand done this last year.

If I get a chance I will post the website that gives you all 3 credit rating agencies for free. Now granted you have to register with them and they keep sending you annoying emails to get you to pay for their service.
0 Replies
 
Linkat
 
  1  
Reply Fri 13 Feb, 2009 03:30 pm
I believe this is the website I had used

http://www.experian.com/
Slappy Doo Hoo
 
  1  
Reply Fri 13 Feb, 2009 06:23 pm
@JustBrooke,
Great info!

Not nitpicking, but I thought the FHA loans were 2.5% down? At least that's what my mortgage broker told me, I'm just starting the process to buy another property, and my philosophy is less out of pocket, the better.

I'm definitely going to look into your links on foreclosures & 2o3K this weekend...

Speaking of credit, my score dropped from over an 800 to a 680 within a year. Besides putting on a little credit card debt, my credit union shows a 30-day late on my motorcycle loan from a year ago...even though the payments were automatically deducted and on time, the first payment wasn't processed properly(partially my fault too), so they're researching it. Hopefully they'll send the bureaus a letter so it's corrected(or I'll fight it HARD). Point of story: check your credit every year.
cicerone imposter
 
  1  
Reply Fri 13 Feb, 2009 06:47 pm
@Slappy Doo Hoo,
Slappy, When we took out the equity line of credit, we also processed the auto pay on the loan. The bank screwed up, and charged us late fees and extra interest - which they finally reversed after talking with the bank for several hours to clear it up - with "their" documentation. Screwy! Our FICO score dropped to below 800, but it's back up again.
0 Replies
 
JustBrooke
 
  1  
Reply Fri 13 Feb, 2009 08:51 pm
@Slappy Doo Hoo,
Slappy Doo Hoo wrote:

Great info!

Not nitpicking, but I thought the FHA loans were 2.5% down? At least that's what my mortgage broker told me, I'm just starting the process to buy another property, and my philosophy is less out of pocket, the better.


It was 2.5%, but all that changed as of Jan 1, 2009. Now it's 3.5%. That's still a great deal though, ya know?

Remember with an FHA ...... you can own other properties. You just can't have more than one FHA loan at a time and it has to be on your primary residence.

Slappy ..... those 203K's are great loans. Just make sure your loan officer has done them before. You wouldn't want a novice to tackle it for you. They really need to know what they are doing. Easy to screw up, if not.

Rates on a 30 year standard FHA were at 4.875% par, most of this week. Although today they closed the week out at 5%. No biggie. Rates jump around all the time. Most of the time in the range that rates are in right now, you can pick your price and hold for a lock. A gamble......but one that has been paying off in this environment.

Robert Gentel
 
  1  
Reply Fri 13 Feb, 2009 09:41 pm
@Slappy Doo Hoo,
Slappy Doo Hoo wrote:
Here's why: lenders look at more than just a credit score on your report. So if you hit a 700 score, but your history is just 1-2 credit cards for a short time, you're still a 'ghost,' with a very limited credit background. Which, it'll be tough to get a high score with just a couple cards in a short time anyway. And lenders look for more than just credit cards, they want to see that you've paid off actual loans.

Which is why I don't know if less than one year of doing this will get you a mortgage, I would think relying on just the credit card trick, no way.


My credit rating was in the 600's early in my credit history and when my average account age passed 3 years it rose above 700. I've heard the 3-year average from a couple of different sources now and my understanding is that this is the main threshold they are looking for.
0 Replies
 
Robert Gentel
 
  1  
Reply Fri 13 Feb, 2009 09:47 pm
@Linkat,
That's just one of the three, they are all required by law to give you a free credit report once a year (like you said) and here is the site where you can get them from all three:

https://www.annualcreditreport.com/

Your point about doing your own check is a good one, this is a "soft" credit check that doesn't impact your rating, and as you note, if you have a lot of credit checks (and the figure for "a lot" is low, I think 10 in a couple years can have a negative impact) creditors assume you are shopping for credit in multiple locations and may be overextending yourself.
Slappy Doo Hoo
 
  1  
Reply Sat 14 Feb, 2009 09:00 am
@JustBrooke,
Well...the bank will think it'll be my primary residence!

And I'm psyched I'm refinancing one of my places, I got 2 years ago...no money down, and I have equity in it, even in this toilet of an economy...nice...
0 Replies
 
Linkat
 
  1  
Reply Wed 18 Feb, 2009 12:43 pm
@Robert Gentel,
Yes, true - but I got all three credit scores using that one site.
cicerone imposter
 
  1  
Reply Wed 18 Feb, 2009 02:20 pm
Just a thought: with our current economic crisis that pretty much destroyed many/most of the developed countries, it was a simple matter of the people offering credit to look at a) income tax returns, and b) perform a credit check.

Simple things can destroy whole economies, because greed takes over common sense.
0 Replies
 
kickycan
 
  1  
Reply Wed 18 Feb, 2009 04:27 pm
Wowser, a lot of info has been posted since I last visited this thread. Thanks, everyone! I guess before I do anything I should get my credit score, but I am totally scared shitless of giving out my information over the web. Robert, are you absolutely sure that it is safe to enter my social security number and personal info on that AmericanCreditReport.com website?
Green Witch
 
  1  
Reply Wed 18 Feb, 2009 04:37 pm
@kickycan,
You can also go to your bank and they will do it for you. They might ask for printing fee of something like 5 bucks.

0 Replies
 
Linkat
 
  1  
Reply Wed 18 Feb, 2009 04:43 pm
@kickycan,
I know that the experian is safe - it is one of the big three and I've used since a couple of years ago.
kickycan
 
  1  
Reply Wed 18 Feb, 2009 04:53 pm
@Linkat,
Linkat, thanks. I'll try it then. I try to avoid paying bank fees for anything if I can help it.
0 Replies
 
Robert Gentel
 
  1  
Reply Wed 18 Feb, 2009 04:53 pm
@kickycan,
kickycan wrote:
Robert, are you absolutely sure that it is safe to enter my social security number and personal info on that AmericanCreditReport.com website?


That's not the name of the site. It's annualcreditreport.com. I'll let the FTC vouch for it:

http://www.ftc.gov/freereports

Quote:
A recent amendment to the federal Fair Credit Reporting Act requires each of the nationwide consumer reporting companies " Equifax, Experian, and TransUnion " to provide you with a free copy of your credit report, at your request, once every 12 months. But there’s only one online source authorized to do so. That’s annualcreditreport.com. Beware of other sites that may look and sound similar.


Note that some of the credit reporting agencies will not show you their "score" for free, just the information that they base it on (in case you need to dispute any of it) and try to upsell you to show you the score.
Robert Gentel
 
  1  
Reply Wed 18 Feb, 2009 04:58 pm
@Linkat,
Linkat wrote:

Yes, true - but I got all three credit scores using that one site.


I think they might have sent you to the site I linked. The consolidated site sends you to each of the respective sites with a frame at the top and I think some of them send you to it if you request a free report from their site.
kickycan
 
  1  
Reply Wed 18 Feb, 2009 05:50 pm
@Robert Gentel,
Robert Gentel wrote:

kickycan wrote:
Robert, are you absolutely sure that it is safe to enter my social security number and personal info on that AmericanCreditReport.com website?


That's not the name of the site. It's annualcreditreport.com. I'll let the FTC vouch for it:

http://www.ftc.gov/freereports

Quote:
A recent amendment to the federal Fair Credit Reporting Act requires each of the nationwide consumer reporting companies " Equifax, Experian, and TransUnion " to provide you with a free copy of your credit report, at your request, once every 12 months. But there’s only one online source authorized to do so. That’s annualcreditreport.com. Beware of other sites that may look and sound similar.


Note that some of the credit reporting agencies will not show you their "score" for free, just the information that they base it on (in case you need to dispute any of it) and try to upsell you to show you the score.


Ah yeah, that's the site I meant. I was typing too fast and not paying attention to details when I posted that.

Okay, so I guess that's the site for me. Thanks!
 

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