On The Case: Running Your Own Credit Score, Late Mortgage Payments, and Loans for Duplexes
I ran my own credit report last month from online credit monitoring company. Can I just give that to my mortgage broker?
You see the ads all over TV and the web – get your credit score. However, the credit scores you obtain from these businesses are not the same as the detailed ones used by lenders to determine eligibility. In fact, because they don’t include ALL the information in a traditional credit score, they could be off by as much as 30 to 50 points. These consumer/retail credit websites can be helpful for monitoring your credit, but won’t help you to get pre-approved for a loan. If you do want to see your real credit score, the federal government allows consumers to get one FREE credit report per year. Go to annualcreditreport.com to learn more.
If I am late on a mortgage payment, can the lender charge me a late fee?
Yes, they can. Be sure to check your loan documents to see if there is a late payment penalty. Most loan programs have a grace period of up to 10 or 15 days. The late fee is usually a few percentage points of the monthly payment. If it seems excessively high, check with state requirements because there may be limits on how much a loan service company can charge. Don’t let this become a habit, though, because it can add needless extra costs to your home loan and will hurt your credit score if you push the envelope too far.
If I am looking to buy a duplex, can I still get a conventional loan?
It depends. If you plan to live in the property, then you are eligible for a conventional loan. If fact, if you live in the duplex, you can also apply for a VA or FHA loan. However, if you don’t live in the home, then the property is considered an investment property. You can apply for a conventional loan, but the terms will be different, including the requirement for a down payment. If there are four units in the building, then you must apply for a commercial loan. Check with lenders to see how the lending requirements may differ for these types of properties.
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