When applying for any type of loan or mortgage, one of the important factors a financial institution will look at is your credit score. These credit checks are necessary as they give that financial institution better insight into the level of risk you may pose for them in a business relationship. This is no longer a time when people get loans from banks they have had personal relationships with for a long period of time. Although not a definite benchmark, your credit score is an indicator of your ability to pay back that loan.
While it might seem that a credit score is number you have no control over, the fact is there are several things to consider. The first of which is how the number of credit checks you apply for affect your score. There are two types of credit inquiries, which is important to know since only one of those will negatively affect your score. That type is known as a hard inquiry, due to how it involves you initiating an application for credit. This is done for potential lenders or financial institutions and is necessary when you are applying for an auto loan, credit card or mortgage. On the other side of the fence are soft inquiries, which don’t affect your score in any way. This type of inquiry is not initiated by you, nor does it involve you applying for credit. Soft inquiries are mostly credit checks that have been requested by employers or potential landlords. Basically from people/institutions that are entering into business with you and want to verify you are who you say you are.
Hard inquiries stay on your credit record, and can lower your score by about five points for a few months. Those few points may not seem much, but if you have several pulls then it might drag your score from something considered above average to just good. See below for the categories of credit scores and what your number means:
- Excellent: 730 and Higher
- Above Average: 700-729
- Good: 670-699
- Below Average: 585-669
- Poor: Less than 585
Credit Scores aren’t an exact number, each bank/lender uses various scoring models to grant you credit of any sort. What is important to score: payment history, credit utilization (30% of balance), new credit and derogatory items including late payments, collections, judgments and liens. Integrity Financial loan specialists can give you all of the facts about the mortgage options you qualify for and help you understand your credit score. Give us a call today at 1-877-760-9854 to find out more information.
If you purchased your home at a time when mortgage rates were high, then refinancing could be a good option to lower your monthly payments. When rates are lower, as in what we are seeing today, refinancing can potentially save you thousands of dollars in interest. Locking in this lower interest rate is great, and refinancing can come with some other benefits as well. However it can be a tricky process and this post will talk about some of the items you will need.
Generally, most mortgage brokers or financial services companies will require a checklist of items for you to have in order to move forward with refinancing. Some items are more readily available, but others may take some time in order to gather. Use the below general refinancing checklist to see what most lenders require, so you can be best prepared.
- Photo Identification: Driver’s license or passport can be used, but make sure both aren’t expired!
- Proof of Income: A previous month’s pay stub is required to verify your total year to date income.
- Asset Statements: Bank account statements for your Savings and Checking from the past 2-3 months.
- W-2 tax forms: Previous two years of documents help lenders verify your previous employment and income history
- Homeowners Insurance: Needed to show that you have current coverage on your home.
In order to find out more about what you will need for refinancing or if it even is the right option for you fill out the loan application to have a mortgage consultant contact you. Integrity Financial loan specialists can give you all of the facts about the refinancing options you qualify for and help you through your buying process. Give us a call today at 1-877-760-9854 to find out more information.
The commercial property real estate market is full of opportunities but can also be a sizeable investment for businesses and individuals. If you are planning to enter the market and are researching commercial mortgages and commercial loan programs this blog post contains some helpful information to start your search. The first item to understand is the similarities and differences between commercial and residential mortgages.
The biggest fundamental difference is that the collateral for this loan type is required to be a commercial building or other business real estate and is not residential property. Secondly, with commercial mortgages the qualifications follow a different standard. When applying, financial institutions look at the property and the income stream it will generate compared to residential mortgages in which lenders mainly look at the borrowers financial and credit history. One tip to consider is that personal credit is still a factor in commercial mortgage loans, as the investor will want to know you have a good history of paying off previous debts. Down payments also differ, with the rates being much lower for residential mortgages. With rates for commercial loans typically requiring 20 percent down it can really impact your property investment location and strategy.
The length of payment is also a factor where commercial mortgages with balloon payments can be amortized over a longer period of time but have a shorter term payout date. This type of commercial mortgage is great because it involves low monthly payments; however the downside is at the end of the term you’re left with a large, or ballooned, dollar amount comprising the remaining interest and loan principal. It is important to note here that when the term is due, the borrower will most likely refinance the loan or sell the property to make the final payment. Other commercial loan types are available, and include the following:
- Working Capital Lines of Credit
- Small Business Administration Loans
- Partner Buy Out
- Business Acquisition Lending
- Equipment Finance
- Accounts Receivable Lending
Now that you have a brief overview, it is important to select the right lender…one who is knowledgeable and has the industry experience necessary to help you through every step of the process. Integrity Financial Services is experienced in commercial loan arena and is available to help you decide which commercial loan is right for you. Contact us today at 1-877-760-9854 to find out more information.