Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter


Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

9 Things You Should Do to Get the Mortgage of Your Dreams

Written by Sue Stewart on February 18, 2011 in Real Estate  |   No comments

9 Things You Should Do to Get the Mortgage of Your Dreams By Sue Stewart, MortgageMatch.com Sue Stewart of MortgageMatch.com has more than 15 years of executive experience in mortgage finance and 27 years in the industry. She has overseen all aspects of major mortgage…

9 Things You Should Do to Get the Mortgage of Your Dreams
By Sue Stewart, MortgageMatch.com

Sue Stewart of MortgageMatch.com has more than 15 years of executive experience in mortgage finance and 27 years in the industry. She has overseen all aspects of major mortgage banking operations for leading home builders and real estate brokerage firms.

It’s gotten a lot harder to get financing. In fact, one-third of all borrowers can’t qualify for a mortgage. That’s because lenders have created more hoops for borrowers to jump through.

You might just need some new tools in your toolbox. Here are nine things you should do to get the mortgage of your dreams.

1. Pay down your debt as much as you can before applying for a mortgage.

Lenders calculate the ratio of your debt to your income to determine how much you can afford to borrow. Your total debt-to-income ratio is based on how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans, and condominium fees. The debt-to-income ratio is calculated in two ways: one for all of your monthly liabilities versus income (known as your back-end DTI ratio), and one for just your monthly housing payment (including monthly mortgage payment, real estate taxes, and homeowner’s insurance) versus income (this is your front-end DTI ratio). Your back-end ratio is more important. It should be less than 40 percent, and your front-end ratio less than 30 percent.

By reducing your debt as much as you can, you will improve your debt-to-income ratio and your credit score.

2. Clean up your credit.

Credit is critical today, not just for getting a mortgage, but for getting a mortgage on the best terms. If you have a marginal credit score when you take out a mortgage, it can cost you tens of thousands of dollars over the life of the loan. Your score on the FICO credit rating scale (whose range is 300 to 850) must be 680 today to qualify for a prime loan and at least 720 to get access to today’s best rates. Get your credit history from each of the three credit bureaus—Equifax, Experian, and TransUnion. Review them carefully and clean up errors. Get started early, because it could take months.

3. Don’t make a major purchase on credit and don’t apply for new credit before you apply for a mortgage or at any point before your mortgage closes.

A major purchase or a new credit account is going to increase your debt and negatively affect your debt-to-income ratio. Lenders don’t just check your credit report on the day you apply for a loan; many will also check it right up to the day you close on a home. If you take on a new credit obligation, the lender has to recalculate your debt-to-income ratios, and you could be turned down for a loan at the last minute.

4. Increase your down payment.

Most buyers know that down payment requirements are much stricter today than they were just a few years ago, though low down payment options are available, such as the Federal Housing Administration’s 3.4 percent loans, state housing authority programs, and VA for veterans. On the commercial market, it’s hard to get a mortgage with less than 20 percent down.

If you can swing it, try to increase the percentage of down payment you will pay, either by buying a less expensive house or finding additional cash. A larger down payment affects another important ratio that lenders use, the loan-to-value ratio, or LTV. A larger down payment reduces the size of the loan relative to the value of the home, which improves the LTV and the odds that you will get a loan on better terms. Of course, the less you borrow, the lower your monthly payments will be, which improves your debt-to-income ratio as well.

5. Get ALL your documentation together in advance.

Lenders are tougher than ever in requiring documentation of income, assets, and financial obligations. Don’t wait. When you apply, be ready to provide all the documentation necessary to establish your income and debt, including payroll stubs, tax returns, W-2s, bank statements, investment accounts, student loans, auto financing statements, and credit card statements. If you are applying with another person, both of you must provide documentation. If you are self-employed or if your income varies—for instance, if you’re a salesperson who receives commissions—be ready to provide all the paperwork you can, including pay stubs and contracts with clients.

6. Know and prepare for your cash requirements.

Many buyers are shocked and unprepared when they discover that the cash expenses required to buy a home, in addition to the down payment, can be significant. Today, closing costs can run into the thousands, and they are on the rise. They vary by local laws and customs, but typically include transfer taxes, lenders’ fees, title insurance, escrow, settlement, and home inspection. Lenders are required to give borrowers a binding estimate of all closing costs when their loan application is approved, but buyers are wise to do their own homework so that they are prepared. Sites like MortgageMatch.com give buyers good estimates of most of the closing costs they will incur, and you can see what your closing costs will be for each house you consider—before you make an offer.

7. Avoid jumbo mortgages.

Jumbo mortgages are those that exceed $417,000, in most parts of the country. In high-cost areas like New York City, Washington D.C., Miami, and many parts of California, jumbos begin at $729,750. These limits are the most that Fannie Mae and Freddie Mac will pay for a mortgage, which means that jumbos must either stay with the lender that originates them or be securitized privately. Consequently, jumbo rates are higher, because they pose more risk to the lender. Because they are accepting more of the risk, jumbo-loan lenders require strong credit, a down payment of 20 to 30 percent, and proof of income. At times in recent years, jumbos have been hard to find, which can raise their costs even more.

Borrowers can reduce their
interest costs and improve their chances of qualifying by staying under the limit for jumbo mortgages, either by increasing their down payment or decreasing the cost of the house they buy.

8. Negotiate a purchase price lower than the value.

Obviously, getting the best deal is in your best interest. It’s also in your lender’s best interest, because the loan is a better deal for him if he can lend less money for the most value, which lowers your loan-to-value ratio. In today’s marketplace, many sellers are willing to deal. By negotiating hard, you have a good chance of getting the seller to agree to a contract that turns out to be less than the appraised value of the property. Sometimes you can reduce the price by handling certain repairs yourself or by agreeing to rent back if the seller needs some extra time before he is ready to move.

You won’t know exactly what the appraised value of the property is until your lender orders an appraisal, but you can get a good idea. First, check out the property’s value with the valuation tools available on Realtor.com and other sites. You’ll find variance based on the differing databases the computer models use to arrive at a value. Ask your Realtor to do some research on your local multiple listing service to find recent sold data for comparable properties, which are also available on Realtor.com. Should the appraisal come in too low, you can ask your lender for a second appraisal, but you will be charged for it.

9. Don’t fall for phony rates.

When you see attractive rates advertised on the Internet or TV for purchase mortgage or refinancing, be careful. Rates change several times during the day. They differ by locale. They differ for each borrower, based on documentation, credit, loan-to-value ratio, debt-to-income ratios, loan type, and other factors. The rates you see bouncing around on the Internet are the very lowest rates, for borrowers with extraordinary credit and no contingencies. They are not “real” rates offered to borrowers taking out real loans.

What counts is the actual rate you’ll get based on your situation. You can find that out by going to websites like MortgageMatch.com, where you can enter your information anonymously and explore different scenarios based on the rates for which you qualify, or by talking to a variety of lenders.

Sue Stewart of MortgageMatch.com has more than 15 years of executive experience in mortgage finance and 27 years in the industry. She has overseen all aspects of major mortgage banking operations for leading home builders and real estate brokerage firms.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.

No comments yet

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Real Estate Archive