When you apply for credit - whether for a car loan, mortgage, credit card, etc., information in your credit file is fed into a statistical model. That model assigns a numerical score designed to predict your risk as a borrower. The higher the score, the safer the borrower (from the creditor’s point of view). Credit scores have been utilized by lenders for over 20 years, but have only become common practice in the mortgage business in the past 5 years. The most widely recognized score for the mortgage industry is the FICO, or Fair Isaac Score. There are three credit bureaus in the country of which each have their own names for the FICO score. The FICO score actually is from Experian, while Equifax uses Beacon scores and Trans Union has Empirica scores.

How does my Credit Score affect getting a mortgage?

FICO scores range from approximately 350 to 875 points. The higher the number, the lower the risk of default. A high credit score may often mean a speedy and competitively priced mortgage loan. On the contrary, a low score could mean higher interest rates, and more documentation. Many lenders do not make loans to consumers with scores under 620. (But Florida Mortgage Group does!)

How can I get my credit score raised?

It may take some time, but it can be done.

Be sure to make all payments on time.

Keep balances on open accounts as low as possible.

Close the accounts that you’re not using. (Credit is good - too much credit will hurt your score.)

Keep inquiries to a minimum. Don’t let anyone access your credit report unless they have good reason to. (Inquires made by the person listed on the credit report does not affect credit scores.)

It is a good idea to periodically check your report to see what is being reported to your credit file. You may contact the 3 credit bureaus directly and request a copy of your report. If there is information in your credit file that is incorrect, re-contact the 3 credit bureaus, and dispute the inaccuracies. Information must be presented to all three bureaus to ensure it will be corrected properly. Your score cannot be changed by any other source than the 3 bureaus. Here are their phone numbers.

Equifax (800) 685-1111

Experian (888) 397-3742

Trans Union (800) 888-4213

Adrian Skiles, GML

Adrian Skiles, GML has over 20 years experience in the mortgage and real estate industry. He is currently President/Broker of Florida MortgageGroup, Atlanta Mortgage Group and The Mortgage Group of North Carolina. On the web at http://www.efloridamortgagegroup.com/, http://www.atlantamortgagegroup.com/ and http://www.mortgages-northcarolina.com/.

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Have you ever seen an ad that read, “Repair Your Credit -Guaranteed!” or “Perfect Credit in 30 Days!” or some similar ad? Sounds great. Who doesn’t want a better credit rating?

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Most property buyers understand that a title search is necessary to be sure they are receiving a marketable title at closing. However, there are some title problems, which cannot be discovered even through the most thorough title search.

There are hidden hazards, which are beyond the scope of a reasonable search of title records. These include such things as: forgeries, fraud, errors by the Clerk’s office in the recording of deeds, mechanics liens, defective foreclosures, faulty surveys, misinterpreted wills, conveyances by a minor or a mentally incompetent person, an undiscovered heir or ex-spouse who returns to claim interest, a deed delivered after the death of the property owner, and other issues.

A title insurance policy protects you from a loss, which would result from any of the title defects above, up to the policy amount.
A “Lender’s” title insurance policy provides protection to the lender up to the loan amount. In the event of a claim a title insurer covering a lender will cover that lender’s loss, acquire the note on the property and enforce payment of any remaining balance from the borrower.

An “Owner’s” title insurance policy protects the property owner’s real estate equity, which is the difference between the Lenders Title insurance policy amount and any liens or encumbrances on the property, which are specifically excepted in the policy.

The cost of an Owner’s policy is minimal when obtained at the same time as the Lender’s title policy because the title insurance company gives a “simultaneous issue rate.”

A homebuyer pays a one-time premium for Owners title insurance, and the Owners title insurance itself lasts as long as the purchaser or his/her heirs own the property. Lenders title insurance must be reissued when refinancing the mortgage.

Remember that a title insurance policy does not ensure that title problems will not occur, but it does protect you from loss resulting from title defects, which threaten your ownership up to the policy amount. Title insurance also pays legal fees involved with defending your rights. Although title losses occur infrequently, they can be very expensive and time-consuming when you are not properly insured.

Owner’s Title Insurance may not be included on your Good Faith Estimate because some lenders in certain states do not require it. Also in some states it is the responsiblity of the seller to pay for and provide it.

Adrian Skiles

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