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Answers to Lender Questions We All Have (Part 2)

Let’s dig back into more lender questions that we all have!

How long do I have to wait to buy a home after a foreclosure or bankruptcy?

  • If using a Veteran (VA) loan you can buy a home after 1 year following a foreclosure to buy a home.

  • All other loan types must wait for 4 years after a foreclosure to buy a home.

  • If you are using a Federal Housing (FHA) loan you must wait 2 years after bankruptcy to buy a home.

  • If you are using a Conventional loan you must wait 3 years after bankruptcy to buy a home.

Foreclosure is when you receive a “Notice of Default”, which is equivalent to being 90 days late on your payment.

How does pulling my credit work – Why is my lender credit score different than Credit Carma?

A lender uses a FICO credit score, which is different than the normal credit score you get through Credit Carma. Why? Because a lender has more stringent guidelines, and they carry a greater burden of risk lending on a home versus a credit card or even a car. They have to use an algorithm that is based off buying a house versus a getting approved for a credit card.

A normal (Credit Carma score) shows how you make your payments. A FICO (lender) credit score is asking the question, “do you go one step further on your big balance items?” For example, do you make additional payments on your big-ticket items? Do you have liquidity (cash assets), and do you take your extra money to proactively pay off your debt?

Does pulling my credit hurt my credit score?

Pulling your credit on Credit Carma does not not hurt your credit because it is not a “inquiry”. It is a self-pull. When a lender pulls for home credit, it dings credit 3 points. A 3-point credit ding can be quickly made up for most buyers, and in the long run it does not hurt you.

How do I increase my credit score?

Here are a few quick tips to increasing your credit score:

  • If you want to increase your score get any account down 30% or lower, or increase line of credit.

  • Best way to increase credit score quickly is to use a secure card (Put $500 on a card).

  • Use Bryant for your credit reports because they report every month.

How high should my credit be to buy a house?

Lenders can do a lot to help make numbers work for your home purchase, but realize the lower your credit score is, either the less you be able to get in lending and/or the higher your payments might become. If your credit is below 666, a home purchase will be doable, but difficult. We recommend Do not look at houses until your score is above 666. It is going to put you in a much more stable and flexible negotiating place on your purchase. Your credit is a litmus test of your life. It is a testament how you deal with everything.

Can I reorder an appraisal if the value comes in under purchase price?

- Conventional Yes

- FHA – You can do a second appraisal if there is a loss of money on price and you have better comps


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