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CREDIT: Check Credit 3 to 6 months before applying for a loan. If there is any derogatory information, you then will have an opportunity to rectify the deficiency.
Accounts with zero balances should not be closed. The information may be useful in establishing a longer credit history as well as increasing the amount of available credit.
A free annual credit report can be obtained consisting of a Tri-merge Credit Report from all 3 Credit Bureaus (Equifax, Experian, TransUnion). Simply go to www.annualcreditreport.com or call 877-322-8228.
CREDIT SCORE: Multiple Applicants: Each of the 3 Credit Bureaus will generate one credit score for each applicant and the lowest score and the highest score for each applicant will be disregarded, resulting in a “middle” score for each applicant. The Underwriter, who is responsible for approving the loan, will use the lowest reported “middle” score from all the applicants to qualify the file.
EMPLOYMENT: Avoid changing employment. Two years continuous employment with the same employer or two years continuous employment in the same field is the standard. One exception pertains to College Graduates. Applicant received a four year College Degree and subsequently obtained employment in the same field as his/her Degree; the two year employment requirement is waived.
PURCHASES: Major credit purchases should be postponed until after Escrow closes.
IDENTIFY A LENDER: With your credit worthiness secure, you are ready to identify a lender. Along with your loan application, you will provide documentation to support your income and financial reserves.
Your application and documentation will be reviewed by an Underwriter, who is responsible for ensuring that you meet all the guidelines for the particular loan product that you are seeking. The Underwriter evaluates Credit Worthiness, Affordability and the Property.
PRE-APPROVAL LETTER: Even if you have not identified a property, based on your credit and documentation the Underwriter is able to generate a Pre-approval Letter. This Letter is essential in stating your buying power and informing the Seller of your credit worthiness.
CREDIT WORTHINESS: Credit Worthiness factors include past credit practices. The Underwriter will ask for a Letter of Explanation explaining derogatory credit such as collection items, late payments, bankruptcy, short sale etc.
A Letter of Explanation also could be requested regarding recent credit inquiries. Specifically, the Underwriter will need to determine if additional credit was granted or denied.
AFFORDABILITY: The Underwriter compares the applicant’s debt: proposed housing expense (mortgage payment, hazard insurance, mortgage insurance if any, property taxes, homeowner association dues if any), credit card payments, installment payments, other mortgage payments, to the applicant’s gross income to determine the applicant’s “DTI” Debt-to-Income Ratio.
PROPERTY: A full property appraisal may be required and the appraisal must be paid for prior to the appraisal being performed.
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This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker # 01821025; NMLS # 135622. Loan approval is not guaranteed and is subject to lender review of information. Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender
The services referred to herein are not available to persons located outside the state of California.
C2 Financial Corporation is approved to originate VA and FHA loans, and has the ability to broker such loans to VA and FHA approved lenders. C2 Financial Corporation is not acting on behalf of or at the direction of HUD/FHA or the VA.
NMLS Consumer Link – //www.nmlsconsumeraccess.org