Established loans are available in this real estate market, however, they are not available at 100%, but at 90-95% maximum. Until lenders can properly assess risk again, this is what we have to work with. Along with the recent reduction in the loan or value offered also comes the requirement of having a higher credit score to qualify. Gone are the days of financing 100% of reported income with a score of 600. It is now very common for a qualifying credit score on an established loan to be at least 680.

With the revolving need for borrowers to buy and refinance, the process still needs to be streamlined for our clients so that we as mortgage brokers can be more resourceful. Every mortgage broker should have access through their credit reporting agency, to a credit scanner and also to a quick qualification mechanism to help their clients qualify for a loan set up in this case.

For example, a satellite cable installer comes to my office and wants to buy a house with his fiancé. All of his income is 1099, and he is subcontracted to various employers. She has a lot of deductions and can’t prove her annual income of $50,000. This is a stated loan, and we did a credit check to find out that she has a score of 650. We need a 680. Many mortgage brokers will automatically refer this client to a credit repair company, which can take months to do anything that will increase the score, plus charge the customer a high monthly fee. Stay away from this option and only use it as a last resort. Last resort, meaning the customer won’t buy for 12 months, and putting them on credit repair will work organically over time. However, in this case, our borrower wants to buy in the next 30 days and needs a 30 point boost on their credit repair.

Any good credit reporting agency will have built-in features to help increase their customers’ credit scores. The first is a credit analyzer. It will cost around $7 to execute, however it will save your borrowers hundreds of additional dollars if done correctly. Basically, you enter a target score, in this case 680, into the system for the borrower. The analyzer will then run the system and tell you exactly what you need to do to get a score of 680.

For example, you have a capital one card with a $2,000 limit and you owe $2,000. If we pay the balance to a 35% debt to limit the balance to $700, your score will get the extra 30 points. The engine indicates that revolving credit will increase, and that makes it seem more solvent. My borrower will need to pay Capital One $1,300 and then receive a letter from Capital One stating the new balance. If done organically, this process can take up to 90 days as creditors take time to update themselves with the credit bureaus. The letter is a test that I can use to present a quick scoring presentation.

The mortgage broker will accept the letter, along with a fee of typically $30 per office, in this case $90, for TransUnion, Eqifax, and Experian. We send this with our letter to the credit reporting agency, which will update it with the bureaus within 5 business days.

You’ve just saved your clients extra months of waiting, so they can move into their home in 30 days. Being resourceful as a mortgage broker in this market is priceless.