Your mortgage credit score often isn't the same as the credit score you looked up online, because your mortgage credit score is often a *different type* of credit score than the one you find on the Internet. In this video I explain why that is, I talk about the different types of credit score (such as the fico score), and I explain what kind of credit score you need if you want to get the best mortgage rate and price.
If you're a first time home buyer don't get caught off guard, make sure you understand your mortgage credit score and how it works so there are no surprises when applying for a home loan. You want to educate yourself as much as possible before you buy a house, and this channel is an excellent place to do exactly that!
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Know why you want your score, know what score you're getting, and make sure it's relevant to the reason that you want it, because it's usually not relevant to mortgage loans. (air whooshing) Hey guys, welcome to my office. Have you ever wondered why you pull your own credit or you look at one of the apps and then you call your mortgage lender and you're like, "My score is what? "And why doesn't it match?" And also another piece of this is, have you ever wondered what mortgage credit score you actually need to be able to get approved for a loan? Those are the topics for today's video.
Welcome to your one-stop shop for anything and everything mortgage education. I drop new videos every Tuesday and Saturday, I would love and appreciate if you would subscribe to the channel, give me a like if you enjoy the video, and I hope that you help me to continue to spread mortgage peace throughout the world.
My name is Stephanie Weeks and I am a loan officer. I have been doing this for a 17 years, I have been recognized in the top 1% in the nation for loan officers and production for several years in a row. There are over 300,000 loan officers to choose from. I have decided to make it my mission to add an education piece to my business, where I help you understand anything and everything mortgage. So welcome to my channel, and I hope you enjoy the information. (air whooshing)
I bet you're wondering, "Why should I watch this video? Why should I stay tuned till the end?" Well, not only am I gonna talk about credit scores and why they're different than what you see on these free services, I'm also gonna talk about what credit scores you generally need in order to be able to get a mortgage. And on top of that, we're even gonna talk about the credit scores you need to have not to get a mortgage, but to get the best mortgage at the absolute best interest rates.
So if this information sounds good to you, don't forget to give me a like on the video so that more people get to see it, share it with your friends and family, and hang in there with me until the end, and I'm gonna teach you everything you need to know. (air whooshing)
So let's dive in because I know that you're dying for this information and I am dying to get it out there. There's so much information on the web about credit scores and how to get them, what's good, what's bad, what you need for different loan types, what you need for different mortgages. So here's something that's very important to realize. Each program type has its minimum set of credit scores, but on top of that, then each lender that decides to stick their neck out and give these loans may have their own requirements as well. That is part of the reason for so much contradictory information on the Internet, is that, one lender might need a 640, the next lender needs a 620. But FHA says they'll take a 580. It's like, what in the world?
Yes, I know. It's so confusing. So generally speaking, generally speaking, because it does vary and it does change, why does it change? Yes, especially through these last few months, it has changed; up down, up down. So generally speaking, you need a 620 for a conventional loan, a 620 for an FHA loan, a 620 for an RV loan, and a 620 for a VA loan. Again, generally speaking, because sometimes in some instances you might actually need a 640, and then sometimes in rare instances, you might actually be able to get something or get a loan shall I say, with less than that 620.
What are the different credit scores? There's a Beacon score, there's a FICO score, there's a VantageScore. And those are all different. I like to say, remember when you were in high school and maybe your school was on a six point grading scale, and the school down the street was on a 10 point grading scale. Well, nobody really cared at all about what those grades were different at each school because they had their own grading scale. That's how it goes with the Beacon versus the FICO versus the Vantage. And on top of that, there's different versions of these scores. That is the reason why you might go to annualcreditreport.com, that's the one that I believe is the best to go to, annualcreditreport.com or whether you go to some of these other ones, like I've heard of Credit Sesame, I've heard of Credit Karma, you've got Experian app, Legimi apps, Equifax apps, you've got your credit card that wants to give you your credit score, right? It's from all these different sources.
I could be wrong, but I don't think that I am: When you to get your credit score, why do you wanna know and why do you care? Well, you wanna know because you probably wanna know what kind of grade that you're going to get if you go to apply for a loan, and especially with a mortgage. What's that credit score gonna be? So if you're pulling from these apps or these free sites and getting a score but you don't know what score you're getting, that's why I have 15 conversations a day that go like this: "Oh, hi, I've got your application, everything looks great, I pulled your three credit scores, I have a 620, a 622 and a 645." And the phone goes silent. And you're like, "Whoa! What do you mean I don't have 700? I went on this app, and I went on this website and my credit card said that have 700." Well, that's because there's different grading scales. And that's because I'm pulling for a mortgage, which is a different type of poll than some of the other polls. It's so confusing, and it's also frustrating. And it's a big piece of information that's not being shared clearly with the consumer.
So, of course track your credit, of course get your scores, of course monitor your credit on a constant basis, but know why you want your score, know what score you're getting, and make sure it's relevant to the reason that you want it, because it's usually not relevant to mortgage loans within my experience of the 15 conversations I have a day that repeat just like what I've just said, be happy to rewind if we play it for you. I wish I could just record that and just like put it out there because I talk about it so much. Because it is very confusing, don't get me wrong. (air whooshing)
Another thing people ask a lot about is, what is an average credit score? And guess what? That's another moving target. Welcome to my world, mortgage industry: Today it's A, tomorrow it's B, then it's yellow, Nope, now it's green, now we want purple. It's all over the place. So, even the average credit score seems to move. I've read things that for years said it was a 680, I've more recently read things that said it was a 720. So, let's just meet in the middle. Let's just assume that a 700 is an average credit score. Anything above 740 is always considered excellent credit. So of course you wanna shoot for the moon, hit the stars, or if you could hit the moon, even better, because having great strong credit puts you in a great position when it comes to getting any type of loan that you're looking for. So make sure you work hard on that and you do a good job and you know what you're getting, what you have, and maybe where you're going.
The last thing that I promised you, I promised you that I would talk about, what credit score do you want to get the best grade to get the best mortgage? Listen, the world is not rainbows and butterflies, as I'm sure you've probably figured out by now. But in the rainbows and butterflies worlds, you would get a conventional loan, you would put 20% down so you paid no mortgage insurance, and you would have over a 740 credit score so that, that be compared with some other factors can get you the best interest rate possible. But don't fret because here's some good news: Let's say you don't meet that criteria, it's okay. Rates are not dramatically different between that scenario and maybe FHA with a 660 credit score and a 3.5% down payment. But a dollar is a dollar. We work hard for our money and every penny counts. But if you don't fit in that little probably 3% window of the population, put 20% down and have an excellent credit score, your problem's still gonna be fine as long as you keep your credit up, you stay at least average or above, which will be great.
Remember, I said average is 700, and I just told you a couple minutes ago that sometimes you get a mortgage loan with a 620. That's pretty below average. So pay your bills on time, keep watching all the videos, keep pulling information that you have applied knowledge because that is power, and you'll have the best mortgage transactions you can, and you'll know what to expect.
My download for you today is going to be your home loan cheat sheet. Just click the link below, download that for free, and I hope that it helps you as it's helped thousands of others with figuring out the different types of mortgages.
Did this video give you a much better massive understanding about credit scores and how some of this stuff works? Because if it did, don't forget to subscribe to the channel, give me a like for the video, give me that thumbs up, and drop me a comment. Let's just say, why don't you type in there, shout from the rooftops? Help me shout from the rooftops and get this information out there. (air whooshing)
If you enjoyed this video, give me a like, subscribe to the channel. I'm reminding you, I drop new videos every Tuesday and Saturday, and let's connect. DM me, I answer all those personally.
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