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Hollee Jo Vail
866-446-5533
E-Mail
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Credit Grades
Mortgage companies often
grade your loan based on certain credit-related items such as payment
history, amount of debt payments, bankruptcies, equity position, and
your
credit score. Below is a
guide to help you estimate your credit grade. This is only a guide as
many companies have exceptions that may result in more strict or more
lenient guidelines.
A General Guide to Credit
Grades
|
Quality Level |
Credit Score |
Debt Ratio |
Max LTV Ratio |
History for Credit Type |
Delinquencies: |
Typical Additional
Requirements |
| |
# of times |
# of days |
Within last |
|
| A+ to A- |
670+ 660 |
To 55% |
To 107% |
Mortgage
Installment/
Revolving |
0
0 - 1
0 - 1 |
-
30
60 |
24 mo
12 to 24 months |
Good/excellent credit during last 2
to 5 years. No bankruptcy within the last 2 to 10 years. |
|
B+ to B- |
620 |
55 |
95 - 100 |
Mortgage
Installment/
Revolving |
2 - 3
2 - 4
0 - 2 |
30
30
30 |
12 mo
12 mo
12 mo |
No 60-day mortgage
lates. 24 - 48 months since bankrupt discharge. Higher number of
rolling lates may be allowed. |
| C+ to C- |
580 |
55 |
100 |
Mortgage
Installment/
Revolving |
3 - 4
0 - 2
4 - 6
2 - 4 |
30
60
30
60 |
12 mo
12 mo
12 mo
12 mo |
12 - 24 months since bankrupt
discharge. High "rolling" lates allowable. |
|
D+ to D- |
550 |
50 |
85 - 95 |
Mortgage
Installment/
Revolving |
2 - 6
1 - 2 |
60
60 |
12 mo
12 mo |
Bankruptcy discharge within last 12 months. Judgments to be paid
w/ loan proceeds. Not in foreclosure. |
| E |
520- |
50 |
80-90 |
Mortgage
Installment/
Revolving |
Poor payment record with
a pattern of 30, 60, and 90+ lates |
Possible current bankruptcy,
foreclosure Stable current employment |
The figures shown here are estimates. When trying to
figure your credit grade, keep in mind the following principles:
-
Other Things Being Equal
When your have bad credit, all of the other aspects of the loan need
to be in order. Equity, stability, income, documentation and assets
play a larger role in the approval decision.
-
Worst Case Scenario
When determining your grade, various combinations are allowed, but
the worst case will push your grade to a lower credit guide. Late
mortgage payments and bankruptcies are the most important.
-
Going Once, Going Twice
Credit patterns are very important. A high number of recent
inquiries and more than a few outstanding loans may signal a
problem. A "willingness to pay" is important, thus late payments in
the same time period is better than random late payments as they
signal an effort to pay even after falling behind.
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