Palos Verdes Home Loans ::13 Credit Score Myths

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Qualifying for a home loan for Palos Verdes Homes

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  1. “Free” credit report scores are accurate and reflect mortgage report scores. No. For the purposes of obtaining a mortgage; free credit reports are literally worthless.
  2. A foreclosure sale damages credit scores worse than short sale. NO. What affects credit scores are the number of “times” the borrower is late (30-60-90 days); not the actual “event”.
  3. A loan mod is viewed the same as a foreclosure/short sale. Yes. If a borrower is granted a loan mod (despite never being late)…Fannie and Freddie (VA and FHA) view loan mods as a default/ short sale. It will be a minimum of 3 years from the date of the modification before a borrower qualifies for a FHA Loan and 4 years for conventional financing. There are some extenuating circumstances so click here for a complete list of wait times for both short sales and BK’s.
  4. Every derogatory item hurts your credit score. No. Items more than 4 years old do not affect your score. California law deems debts over 4 years old are not collectable / enforceable. Collection accounts are often “sold and resold” (creating a “rolling” effect) initially affecting credit scores long after the original debt has long since expired. However disputing debt over 7 years old with the 3 credit bureaus will cause the bureaus to remove the item(s) and bar collection agencies from re-reporting the debt. A rapid “re- score” is quickly accomplished by an experienced loan officer. The cost is typically $50 to $150 per derogatory item.Also a borrower can file a complaint (on line) with the Attorney General of Calif.
  5. Every collection account needs to be paid off to obtain a loan. No. Do not pay off collection accounts (or any old “derogs”) before the COE. Old derogs paid before COE will result in lower credit scores! I know that’s counter intuitive but that’s the way the system is rigged. Whether the item needs to paid at COE, is at an underwriter’s discretion when the loan is approved.It will depend on the amount and how old the item is.
  6. A divorce decree legally discharges a spouse from the responsibility for a debt that was incurred by both parties. Wrong!! A divorce court can’t absolve either spouse form a joint debt.
  7. Co-signing for a loan / credit report will be counted against the debt to income ratios when qualifying for a new mortgage. The answer is mixed. If the “CO SIGNEE” (“child”) makes 12 loan payments directly FROM THEIR OWN PERSONAL ACCOUNTS… directly TO THE CREDITOR…the debt will (usually) not count against CO SIGNER (parent). If a consignee is paying the cosigner directly with cash (or by check) endorsed to the co-signer, the payment WILL count against the co-signers DTI.
  8. Credit scores can be improved quickly if the loan applicant is added to another person’s account(s) with a superior credit score. TRUE. However if a co-signee misses a payment or goes on a shopping binge at Nordstrom’s, both borrowers credit scores will suffer.
  9. Court judgments are only reported for 7 years. The answer is mixed. Judgments are reported for 7 years BUT are valid for 10 years. Judgments can be renewed for another 10 years by refiling the judgement by the prevailing party (winner). Typically after 7 years the judgment drops of the buyer’s credit report BUT the judgment has “morphed” into an “abstract” judgment and attaches to their home after the grant deed is recorded at the county courthouse. Often the homeowner will not discover the “abstract” until they sell (or refi) the home (years later) and the abstract appears on the title report.
  10. Closing credit lines and accounts will raise credit scores. Wrong! Wrong! Wrong! It’s just another misconception that’s killing transactions. Don’t close any accounts with a positive payment history PERIOD!!!!!!!!!!!!
  11. Past debts (not listed) on a credit report, do not have to be paid before the close of escrow. Wrong. If your borrower HAS EVER defaulted on a government debt (state/federal/county),it will come back to bite them at the very last moment just before loan docs are drawn. This includes: child support, student loans, unpaid county hospital bills etc. IF the borrower has funds to pay off this long overdue debt (how likely is that?), this can be fixed easily. If not, the deal dies. At best your escrow will probably close late.
  12. You can have “too much credit”. No. Just keep your balances as low as possible. Older “open” credit lines (even if not being used) contribute to higher FICO scores. Never close a credit line that has a good payment history!
  13. Borrowers should spread out their unpaid balances so that no card has more than a 1/3 balance on any given account. Not really . It is better to have all balances consolidated onto one credit line (at the lowest APR) than to have many small balances spread out over different account. Underwriters may view the latter as credit abuse and it’s much easy for a borrower to to overlook and miss a payment if there are multiple billing cycles being juggled.

Find out your purchasing power for Palos Verdes Home Loans

Meanwhile, here are the homes now for sale in the highest in demand price range for Palos Verdes homes

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$1,200,000 - 3Br/2Ba -  for Sale in Rancho Palos Verdes
$1,200,000
MLS# SB17070604

2821 Calle Aventura
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,225,000 - 5Br/3Ba -  for Sale in Rancho Palos Verdes
$1,225,000
MLS# PV17093264

4818 Elkridge Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,249,000 - 3Br/3Ba -  for Sale in Rancho Palos Verdes
$1,249,000
MLS# SB17107212

18 Stallion Road
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,249,000 - 3Br/2Ba -  for Sale in Rancho Palos Verdes
$1,249,000
MLS# SB17114026

28702 Lomo Dr
Rancho Palos Verdes, CA 90505

Property Type Single Family Residence
$1,250,000 - 4Br/3Ba -  for Sale in Rancho Palos Verdes
$1,250,000
MLS# PV17119240

2727 Calle Aventura
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,250,000 - 3Br/2Ba -  for Sale in Rolling Hills Estates
$1,250,000
MLS# SB17073978

2215 Potrillo Road
Rolling Hills Estates, CA 90274

Property Type Single Family Residence
$1,250,000 - 5Br/3Ba -  for Sale in Rancho Palos Verdes
$1,250,000
MLS# PV17057850

28341 Trailriders Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,270,000 - 3Br/2Ba -  for Sale in Palos Verdes Estates
$1,270,000
New
MLS# SB17144005

4117 Via Picaposte
Palos Verdes Estates, CA 90274

Property Type Single Family Residence
$1,289,900 - 3Br/2Ba -  for Sale in Palos Verdes Estates
$1,289,900
MLS# PV17014067

3428 Palos Verdes Drive North Drive N
Palos Verdes Estates, CA 90274

Property Type Single Family Residence
$1,290,000 - 3Br/2Ba -  for Sale in Rancho Palos Verdes
$1,290,000
MLS# PV17129841

7 Barkentine Road
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,295,000 - 3Br/2Ba -  for Sale in Palos Verdes Estates
$1,295,000
MLS# PV17019894

3721 Palos Verdes Drive North
Palos Verdes Estates, CA 90274

Property Type Single Family Residence
$1,295,000 - 2Br/3Ba -  for Sale in Rancho Palos Verdes
$1,295,000
New
MLS# NP17144432

3027 Crest Road
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,295,000 - 4Br/2Ba -  for Sale in Rancho Palos Verdes
$1,295,000
New
MLS# PV17132916

6939 Hedgewood Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,295,000 - 4Br/2Ba -  for Sale in Rancho Palos Verdes
$1,295,000
MLS# PW17120983

6836 Abbottswood Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,299,900 - 4Br/3Ba -  for Sale in Rolling Hills Estates
$1,299,900
MLS# PV17092838

9 Sunnyfield Drive
Rolling Hills Estates, CA 90274

Property Type Single Family Residence
$1,300,000 - 5Br/3Ba -  for Sale in Rancho Palos Verdes
$1,300,000
New
MLS# SB17138124

29135 Warnick Road
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,338,000 - 5Br/3Ba -  for Sale in Rancho Palos Verdes
$1,338,000
MLS# PV17117007

28405 Trailriders Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,349,000 - 4Br/3Ba -  for Sale in Rancho Palos Verdes
$1,349,000
MLS# PV17122178

6030 Montemalaga
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,349,000 - 4Br/3Ba -  for Sale in Rancho Palos Verdes
$1,349,000
MLS# SB17111402

5672 Sunmist Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence
$1,358,000 - 4Br/3Ba -  for Sale in Rancho Palos Verdes
$1,358,000
MLS# PW17119005

3508 Vigilance Drive
Rancho Palos Verdes, CA 90275

Property Type Single Family Residence

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