Fair Isaac And Your New Mortgage

Copyright (c) 2008 Majestic Help

It is commonly believed that Fair Isaac, the inventor of a prevalent credit-scoring model, might be a good place to start to get some reliable and useful information. Wrong!

Here are some non-answers to questions taken directly from a FAIR ISAAC publication:

*QUESTION: If derogatory information is removed, how much will the score increase? ANSWER: "...it is not possible to estimate how much the score will change..."

*QUESTION: What would happen to the score if an applicant were to pay off his or her balances and/or close some accounts? ANSWER: "It is not possible to ensure that credit scores would increase in this case."

*QUESTION: Do inquiries affect the credit bureau score? ANSWER: "...inquiries may or may not be a factor in the score..."

Get the picture? These answers are not really evasive. The truth is, there are 60 different factors that are used in determining credit score. The mathematical formula utilized is very complex, so it's extremely difficult to predict how isolated factors will affect a particular score. Generally, the borrowers with the highest credit scores probably hold these things in common:

*They use credit sparingly. *They always pay on time. *Their credit accounts have not been recently opened. *They have not been in pursuit of new credit.

How would you like to have the answers to these questions?

*How can using more credit raise my score? *How can paying off collection accounts lower my score? *When does opening new accounts raise my score and when does it lower them? *Which accounts should I pay off to raise my score the most?

There are extra steps you can take to raise your credit score almost immediately. If executed properly these steps end up saving you a fortune if it qualifies you for a better mortgage at a lower rate. This is just another advantage of working with professional mortgage broker who cares rather than responding to countless Internet, phone, and mail solicitations thinking that banks are "competing for your business."

Here is a series of considerations for determining what mortgage lender to use:

1.Check references

2.Look for testimonials

3.Get expert advice

4.Do not pay application fees

5.Do not borrow more than you can pay back

6.Find out how long the loan officer has been in business

7.Have they kept up on the latest fraud prevention courses?

8.Deal with someone local to the area you are buying in. It is easier to resolve problems with someone you can meet face-to-face vs. talking with someone in another state.

9.Make sure that they are telling you how much they are making on the loan. Make sure they discuss how they are paid. If they are a broker they will have to disclose closing costs and yield spread premium.

10.Find out if they are licensed. Mortgage brokers and loan officers that work for mortgage brokers require a license. Mortgage bankers that work for banks or credit unions do not require a license.

11.Find out what percentage of clients are from repeat/referral business. This will give you a good idea on who you are dealing with. See if they will give you the name and number of a closed client.

Knowing how to choose a professional will ensure that you have a greater comfort level while purchasing your dream home.

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