Hard Money Mortgage Lenders

Erika Said:

Calling all professional mortgage lenders........hard question?

We Answered:

Your FICO score should theoretically go up with a higher limit, and a lower usage percentage, both on that card and on overall credit availability.

Your friend is simply wrong. Or at least he is when it comes to mortgages.

I have yet to ever hear an underwriter express concern because there's too much available credit. It may be handled differently by auto financing, but I doubt it, since most of that is FICO-based as well.

My best guess is that your car salesman friend was told that, because it's a good way to beat up a client about their credit and get them to accept a higher rate than they could've had otherwise. Auto dealers get yield spread premiums (back points) from the lender they sell their loans to, based on the rate charged. The higher the rate, the more they get.

Many mortgage companies will do a similar thing, basically putting down your credit rating so you'll feel lucky to get a loan at any price. That way, they can make another 1-2% from selling you a higher rate when they sell the loan off to the investing bank.

It is possible, however, to have too many credit card or revolving accounts. And it's possible to have too many that currently have balances. Both of those are "reason codes" that affect your score. But they are minor issues compared to maxing out a card, or maxing out your overall credit. Having a higher limit on your card will not be a negative unless you spend it all.

Charlotte Said:

Loan officer looking to get into Hard Money Lending..?

We Answered:

Hi,

You can visit http://www.webmoneymanager.info for some useful info related to your query. Good luck!

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