What does my credit score even mean?
As we all know, credit can either help us turn our dreams into a reality or it can be the one road block that keeps getting in the way. What does my credit score even mean?
What is credit?
The credit scoring system was originally designed in the 1950’s to help lenders determine how well consumers could pay back borrowed money. While there have been many updates to how this system is used, the components of a credit score consist of these major factors:
Payment History – 35% Impact
Outstanding Credit Card Balances – 30% Impact
Credit History – 15% Impact
Inquiries or New Credit – 10% Impact
Types of Credit – 10% Impact
What can impact my credit score?
Paying off debts on time has the greatest positive impact on your credit score. Late payments, judgments and charge-offs all have a negative impact. Keeping lower balances on the open credit accounts you have is a sure way to keep that score going up! The longer you have positive credit history, the better. However, multiple credit inquiries in a short period of time, such as applying for multiple credit cards, can have a negative influence on your score. The type of credit you have is also a factor. Having a mix of credit, such as an auto loan and a credit card, is more positive than a combination of debt from multiple credit cards.
What if I don’t have any or enough credit?
There are simple ways to begin building credit history. Start establishing credit history by opening a small line of credit with your bank or credit union and begin making minor purchases that can be easily paid off. Your bank may offer a secured credit card if this is your first time applying for credit. This type of card works like a debit card and will require deposited funds for purchases; just be sure your history will be reported to all three credit bureaus.
What if I have less than perfect credit when applying to purchase a home?
Knowing what is on your credit report is the first step. Obtaining a credit report will show which areas are helping your score and which areas need to be worked on. When applying for a mortgage, your loan officer will be able to see if there are any areas that need work to help you get on the right track for a future purchase.
Want to find out where you stand? Let’s get the conversation started.
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A VA loan, formally known as a Veteran Affairs loan, is a mortgage loan in the United States guaranteed by the US Department of Veteran Affairs that is designed to offer long-term financing to eligible American Veterans in order to help secure housing. VA loans are available for the primary residences of Veterans, active duty members, certain surviving spouses, certain Reservists, and National Guard members, and provide excellent benefits for those who are approved. Benefits of getting a VA loan include equal opportunity, little to no down payment, no monthly PMI, home appraisal and reasonable value calculated, negotiable interest rate, reasonable closing costs, assistance to borrowers, and the ability to finance the VA funding fee.
The US Department of Veteran Affairs doesn’t directly fund the loans through the program, but instead backs them from private lenders such as banks and mortgage companies, which is why Alpha Mortgage can provide VA Loans to those who qualify in North Carolina with more favorable loan terms than they may normally receive.
In order to apply for a VA loan in NC, there are a few preliminary steps one must take in order to reach the application process. The first thing you will need is a Certificate of Eligibility that one obtains from the VA. A Certificate of Eligibility (COE), provides lenders with the evidence that they need to determine if one is qualified to receive a VA loan. As stated on the official website, “The evidence you need depends on the nature of your eligibility.” They provide a table to reference during this process here. It is important to make sure that all of the qualifications
After you figure out what specific evidence you need, and that evidence has been collected, there are multiple ways to go about actually applying for the loan- including online, through your lender, or through mail. Once the loan is approved through the U.S. Department of Veterans Affairs, the rest of the process can be taken care of through your lender.
Whether you have been approved for a VA loan already, or need assistance in the process, remember that Alpha Mortgage is here to help with all of your VA loan needs! Contact us today!
In 1944, near the end of the second World War, President Franklin D. Roosevelt enacted the Servicemen’s Readjustment Act. This is what we know today as the GI Bill of Rights. This act provided veterans with a federally guaranteed home with no down payment. For millions of veterans, this gave them and their families an opportunity to realize the family dream of home ownership.
The loans are guaranteed by private lenders which include banks and mortgage companies. As long as the veteran is eligible to purchase the home, which is required to be for their own personal occupancy, the lender is protected against a loss if the loan is not repaid. This is why no down payment is required and the veteran and his or her family can obtain very favorable financing terms.
If you are a veteran and you want to apply for a VA Loan, what is your next step? The answer is to follow the normal steps of home buying and that is to get preapproved from a mortgage lender such as Alpha Mortgage. We will help determine your credit rating, your income to debt ratio and go through the process of helping you understand what your monthly costs might be. This will give you a solid understanding of what you can afford. Once we have determined what you are preapproved for, we will have a clearer understanding of how much you will need from your VA Loan. The maximum guarantee authorized by the VA is 25 percent of the loan amount up to $104,250 and the maximum VA home loan is $417,000. If you are looking to refinance, a VA Loan can help with that as well. Be sure to ask your Alpha Mortgage broker about the Streamline Refinancing Program. If you qualify you may be able to refinance at little or no expense.
Here in eastern North Carolina we are extremely lucky to be surrounded by so many of our nations finest soldiers who never hesitate to put their life on the line to protect ours. Our appreciation for the men and women of this country runs deep and at Alpha Mortgage we will work as hard as we can to make sure any military family can realize their dream of home ownership. Whether you are a member of Pope A.F.B., Seymour Johnson A.F.B., Fort Bragg, Air Station Elizabeth City, National Strike Force, Camp Lejeune, MCAS Cherry Point, or MCAS New River you may qualify for a VA Loan and we will help make the process as simple and easy as possible.
We have offices in your area that can help you when you are ready. Our Wilmington office is 910-256-8999, our Fayetteville office is 910-484-7272, our Jacksonville office is 910-347-7283, and our New Bern office is 252-634-3000. We look forward to hearing from you and while words cannot truly express our gratitude, thank you so much for your service and dedication to our country.