Friday, June 6, 2008

Commitment of a Other Kind

The call came yesterday, finally at the deadline, my commitment from the mortgage broker came through! This process is an amazing set of how to fit a borrower with a lender, a sort of match making. Lee, my agent, said that my lending package was the cleanest she has ever seen. I've really no contingencies related to close this entire deal.

So you fill out the application, they get your history, credit scores, assets, liabilities, tax history and, in my case, my firm and CPA license. The brokers crank the numbers and find some lender that will bet the farm with you. Let me tell you, I didn't need income to qualify for this loan! Now I can see how the 'sub-prime' market was very dangerous. I'll make another post on that tragedy.

A note on the credit scores. It is a mathematical summation of your borrowing and payment history, along with credit limits and whether or not you borrow money over time. The range of the possible scores are the same for each agency: 300 to 850. The three agencies, Experian, Trans Union, and Equifax, reported 823, 781, 803 for me. In the credit chapter of life, I look like a great bet.

It's not difficult to create great credit scores - first you MUST get your credit chapter in order. I have two credit cards - one for my business and one for me personally. Yes I have a couple of cards, like Lowes - I only used it to get the 10% off and deferred billing when I rehabed by kitchen at Woodsedge. This card was paid off a month before the date due and the card was then put away for the next project. All my bills come out of my checking by automatic debit. I gave up on the "control" and have the utilities and assorted other monthly bills come out of my checking or charged to my credit card. BTW - the credit card is automatically debited from my checking also! Therefore I'm never late :) Also, I never charge/borrow on the credit cards to the maximum limit. The broker indicated that shows "good financial responsibility". His words not mine. Now you can see, the how my scores are high.

Having great credit opens so many doors - better opportunities, better rates, and no contingencies. Come on folks - make the commitment of improving your credit scores. It is easy and really makes a difference to you and your family's financial picture. Give me a call if you need a consult!

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