Dallas Native Voice with Jason Browning | Certainty Home Loans

Mary Beth H.:                    Hi, this is Mary Beth Harrison with Dallas Native Voice and I’m sitting here again with Jason Browning with Certainty Home Loans. And I want to talk about credit. That is so confusing to me. Who even comes up with that stuff?

Jason Browning:               Well, that’s a very good question. Um, you know the three bureaus are kinda the gatekeepers of your ah, your credit scores.

Mary Beth H.:                    Okay.

Jason Browning:               And your credit history.

Mary Beth H.:                    So, when you run my credit, so I give you my social security …

Jason Browning:               Yes ma’am.

Mary Beth H.:                    And you run my credit are all three equal? Are they different? Why are they different? How does that work?

Jason Browning:               Well, it’s all gonna be dependent on what credit, or what creditor is reporting to which bureau. Because then …

Mary Beth H.:                    Ah.

Jason Browning:               … That’s gonna start dominating what score either takes the lead, or is the middle, or the bottom. We take the middle score, ah, the lowest middle score of each borrower. There’s two borrowers, or the lowest, ah, or the middle score of ah, of one single borrower.

Mary Beth H.:                    So one company, more people will put their information with this company than with this company so my credit score might look better because this one didn’t have as much reporting on it as this one did.

Jason Browning:               That’s absolutely …

Mary Beth H.:                    Is that what we’re saying?

Jason Browning:               That’s absolutely correct. And there’s no regulations to these creditors that say you have to report this stuff. So …

Mary Beth H.:                    Well …

Jason Browning:               … There’s certain times when someone will have a mortgage or a car. It’s like well yeah, their payments are for fifteen years, well they’re not required to report it.

Mary Beth H.:                    Ahhh Wow, that certainly makes it tough for you doesn’t it?

Jason Browning:               Yes it does.

Mary Beth H.:                    And for us as a consumer.

Jason Browning:               Absolutely.

Mary Beth H.:                    That’s crazy. So, let’s say, what is a, what is the minimal score you need to be able to buy a house today?

Jason Browning:               That’s a very good question. Ah, so, there’s, it’s two fold really.

Mary Beth H.:                    Mm-hmm (affirmative)

Jason Browning:               So, for a standard, you know government you know, FHA loan …

Mary Beth H.:                    Okay.

Jason Browning:               … A 580 credit score, we’ll go down to a 580.

Mary Beth H.:                    Wow, okay. That’s low.

Jason Browning:               But on the flip side of that if you have someone that is just, say they want to be off the grid.

Mary Beth H.:                    Right.

Jason Browning:               They don’t have any credit. So not a bad score, but no score.

Mary Beth H.:                    And I have clients like that. They, they worked really hard to not have credit cards and consumer data, and they pay for their cars and they’ve been renting so they have rental history but that’s it. They have no credit. So can those people ever buy a house?

Jason Browning:               Absolutely. I’m doing a loan for a gentleman right now. He’s lived in Australia for the last thirteen years.

Mary Beth H.:                    Okay.

Jason Browning:               And um, he does have rental history so we’re able to get that for twelve months. And then you would just go in and add you know, two alternate trade lines. You know, get your cell phone bill for twelve months.

Mary Beth H.:                    Okay.

Jason Browning:               And get your water bill for twelve months. And then you’re able to run that through the desktop underwriter and that can determine whether you can qualify for a mortgage or not.

Mary Beth H.:                    Well that’s good to know because people work really hard to stay credit free and then it turns around and haunts them when they try to do something like buy a home or …

Jason Browning:               Ex- Exactly. Your penalized for doing the right thing, in your mind.

Mary Beth H.:                    (Laugh) Exactly.

Jason Browning:               So you’re absolutely right.

Mary Beth H.:                    Yeah. Wow. Okay, so, um, let’s just say that my credit score is not great.

Jason Browning:               Okay.

Mary Beth H.:                    Um, for whatever reason, student debt, didn’t pay on time, whatever. Is there anything I can do to improve that or, or, what, how does that work?

Jason Browning:               Yes, absolutely there are ways. The first thing I would say is, you know get with your lender …

Mary Beth H.:                    Mm-hmm (affirmative)

Jason Browning:               … And see where you’re at. Even if you’re not looking to purchase for a year. Maybe there’s nine months of work that you need to do.

Mary Beth H.:                    Okay.

Jason Browning:               And then you’ll be ready in a year. You know some people will wait, most people would say, well I’ll just wait for a month or two before I buy and then the- then they’re six or nine months down the road before they can do anything.

Mary Beth H.:                    Right.

Jason Browning:               So first things first, get your credit looked at. Not through Credit Karma, through an actual mortgage company. And that way, you can see what you’re working with. And then, at that point, it may be, it may not be as bad as you think.

Mary Beth H.:                    Huh, okay.

Jason Browning:               It could, again, we’re doing three scores, so we take the middle. You may have one that’s really poor. But the other two get you qualified.

Mary Beth H.:                    Interesting. Okay, so then our word to a consumer would be, start your purchase process early.

Jason Browning:               Absolutely.

Mary Beth H.:                    So, if you’re thinking you want to buy a house this year, it might be wise to sit down with you, and just go over what’s there, and if it is fixable, what do they need to do to fix it? Uh, for example, if you’ll pay off your furniture, and get your car down several payments, we’d be okay.

Jason Browning:               Right. I mean, it could be as little as something like, if you make 97 dollars to this one credit card-

Mary Beth H.:                    Right.

Jason Browning:               You get 17 points, and you’d qualify.

Mary Beth H.:                    Okay.

Jason Browning:               It could be very, very minimal.

Mary Beth H.:                    Interesting.

Jason Browning:               There’s a lot of that we can do in house, you don’t have to talk a credit repair person, there’s some very minor things that you can do, uh, to get your scores into a qualifying level. And then you set the stage to going, “Hey, we’re in a competitive market right now, I’m gonna start my search now, I know what I’m doing.”

Mary Beth H.:                    Right.

Jason Browning:               “I know what I’m able to do.” So …

Mary Beth H.:                    Right. Nothing’s worse than getting to that point of being excited about buying a house, and find out that you, that you can’t. That’s, um, that’s always disappointing. So, we wanna start that early, and even of you’re not ready to buy in the next handful of months, get ahead of that game.

Mary Beth H.:                    And then, I know once you go under contract, do not put anything on your credit. That’s really important.

Jason Browning:               The main thing there is, do not open any new trade lines. Do not go out and get a new car, I know you’re so tempted to go buy a new couch for that house.

Mary Beth H.:                    Right.

Jason Browning:               Wait until you close.

Mary Beth H.:                    Right.

Jason Browning:               Wait until you close, ’cause that can have an adverse impact on your credit score. And we do a soft pull behind the scenes, before closing and we’ll know if you open a new debt. And then they have to count in your debt ratio, and it can disqualify you. I’ve had it happen. I had someone buy a new car, and it disqualified them. So …

Mary Beth H.:                    Yeah. And it’s my understanding, so the consumer can shop, although everyone goes to the same well for their water. So, interest rates are interest rates. They don’t change from one part, you know, one company to another. That’s … it’s just, it is what it is.

Jason Browning:               That’s right.

Mary Beth H.:                    Uh, but you can pull credit for the same line item. So, if I want to pull credit from this lender, or this lender, or this lender, it will not effect my credit, because it’s for one purpose.

Jason Browning:               Correct. And then, again, it all depends on your timing. Okay, if you do it just, a ton in a short period of time-

Mary Beth H.:                    Right.

Jason Browning:               Then, you could have had an adverse, you know, action to your credit score.

Mary Beth H.:                    Okay.

Jason Browning:               Um, if you shop one or two lenders, you should be just fine, as long as it’s, oh, you know … within like a 60 to 90 day time frame.

Mary Beth H.:                    Right.

Jason Browning:               You should be just fine. And then, that way you’re not being held, having it held against you because you’re shopping.

Mary Beth H.:                    Okay. And, but what does cause a problem is to have your credit pulled from say, your insurance company, your car dealership, and a credit card company. Now you’ve hurt your credit.

Jason Browning:               Absolutely.

Mary Beth H.:                    And it cannot be repaired for a while.

Jason Browning:               Absolutely. And another, you know, misconception out there is when you get a credit pull for a mortgage, that it just automatically lowers your score.

Mary Beth H.:                    Right.

Jason Browning:               Now, the thing about shopping for a mortgage is, just because you get pre-qualified or have your credit pulled, you’re not obtaining new debt. You’re shopping for debt.

Mary Beth H.:                    Good point. Okay.

Jason Browning:               Credit card, you have new debt right away.

Mary Beth H.:                    Hmm.

Jason Browning:               No new debt when you’re shopping for a mortgage.

Mary Beth H.:                    That’s, that’s a really good definition for that. Gosh, a lot of good information, thank you so much. And thanks for listening. And as always, you can find us on all social media at dallasnative.com and we’re where you are. Thanks for listening.

Jason Browning:               Thank you.

 

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