Hal's Mortgage Blog

that Mortgage Credit Scores are not the same as Automobile Credit Scores and Consumer Credit Scores? That's right. Most people go online and obtain a copy of their credit report and scores thinking that this will tell them if they will qualify for a mortgage.

Most mortgage scores vary from 330-850. Consumer scores can vary from 250-950. Automobile scores are also different. Why? Because of the amount of the loan and the length of the loan. The score is designed to predict the likelihood of default. The higher the score, the less likely a borrower is to default.

A furniture loan typically extends for 1-2 years and $1,000-$3,000. Automobile loans 3-6 years and $5,000-$40,000. Mortgage loans? 15-30 years and anywhere from $100,000 and up. It stands to reason therefore, that mortgage loans are more risky for the lender than shorter term loans.

My advice to my clients is this - let a mortgage professional review your credit before you actually apply for a loan. The sooner the better. You'll save money over the life of the loan with a lower interest rate and if you have some work to do to improve your score, you'll have a little time to accomplish your goal.

If you would like some tips on how to raise your score give me a call or email me.