Atlantic Bay Mortgage Group

Your personal Mortgage Banker can help.

Analyzing your credit

If your less-than-perfect credit score is holding you back from applying for a mortgage, don’t let that keep you from contacting an Atlantic Bay Mortgage Banker. We can help you analyze a computerized report, available through the mortgage software used at Atlantic Bay, that will identify the areas of your credit history that need improvement. We can then suggest a plan of action to get you back on track as soon as possible, without enlisting the help of a credit repair service. It also helps to know what it is that mortgage company underwriters look for once you’ve submitted a mortgage application.

The Three Cs: Collateral, Capacity, and Credit

Underwriting is the process of providing an approval or denial of funding to potential home buyers, based on factors such as credit, employment, assets, etc., and matches approved risks with appropriate rates, terms and loan amounts.

When your loan is submitted Atlantic May Mortgage Group for underwriting, it goes directly into the hands of one of our local underwriters whose job is to determine your “credit-worthiness” or your ability to repay the loan. Here are a few of the items that are considered when underwriting your loan.

The Property

The property is the lender’s “collateral” for the loan. The value, marketability and

condition of the property are extremely important. The underwriter looks at the

appraisal for this information.

Your Income

The underwriter looks carefully at your ability to repay the loan. Your job stability

and gross income (in relation to your expenses) is critical in this regard. Most income must be verified as having been received for the most recent two years to be used for qualifying purposes.

Your Employment History

A stable history of employment in the same line of work is considered ideal. “Job-hopping” is not looked upon favorably because it may lead to unstable income.

However, if you have switched jobs within the same line of work for advancement in that field, there should be no problem.

Your Assets

The money you have available for a down payment, closing costs, cash reserves (money left over after closing), and other liquid assets is your net worth. You must demonstrate your ability to save money and manage your financial affairs. We must verify the “source of funds” or where the money for the down payment and closing costs came from. Once you’ve applied, never move money around (pay off bills, get a gift, etc.) without first consulting with your mortgage consultant.

Your Credit History

Your credit score is a factor that will be considered by the lender when they look at your loan application. They want to know what your credit history is, and whether you have the ability to pay back the loan you are asking for. In short, good credit translates into lower rates for the home buyer and represents less risk to the lender. Credit scores can range between a low score of 350 and a high of 850. The higher the client’s score is, the less likely they are to default on their loan.

Your Debts

The amount of debt you have affects your ability to repay the loan. Excessive use of credit will not be looked upon favorably. These factors affect the final loan decision.