If you missed our most recent edition of @Homes Radio you have some major catching up to do! We had a GREAT discussion with loan office Shelle Neupert of PNC Bank about getting financed for a home, improving your credit, and how to avoid any mortgage “snafu”s after you’re under contract for your home.
We learned some pretty surprising things about credit during our chat. Namely, the category “Dispute” appearing on your credit score is a “no go” for getting a home loan. You can technically dispute a collection, but to get approved for financing, the collection must appear in the bureau report as either “Resolved” or “Paid”. Who knew?
We also debunked a few financing myths:
- A 20% down payment is not required for all loan products. However, many loan products with criteria less than 20% down also come with PMI.
- You do not have to have “perfect credit” (read: score of 720 or above) to get financing. While criteria varies among loan products, PNC Bank has a product with a minimum credit score of 620 required. That’s just one example.
- It is not necessarily “harder” to get a loan post market bust. There is more documentation required to get a loan, which can be particularly problematic for individuals who are undergoing a job transfer or those who are self employed.
And, of course we’d be kicking ourselves if we didn’t cover the huge mortgage “DON’T”s for getting to the closing table unscathed:
- DON’T make large purchases – It’s going to throw the underwriters off.
- DON’T open a new line of credit – No new credit cards, car loans…etc. It may catapult you outside the perimeters of your loan product criteria. Don’t even cosign a loan (which is good advice anyway.)
- AVOID inquiries to your credit – Surprise! Having your credit “pulled” can actually lower your score.
- DON’T randomly deposit thousands of dollars into your bank account – Your lender is required to have thorough documentation for any large deposit, so if you win the Publisher’s Clearing House Sweepstakes, talk to your lender before you deposit those winnings!
Our biggest take away here is that you really should speak with a trusted local lender before you start “house shopping”. You might find the amount of affordable loan products available surprising.