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Tulsa Mortgage : Podcast 145 – Part 1

Episode-145-4.26.17-TLC-Podcast.mp3

Tulsa Mortgage This is Steve Currington dotcom and the Steven Tyler show episode number 145.

Steven Tyler and. Steven Tyler why negotiating for a writer is good for the Smarts.

Good for him that they’re tough for you. No one knows what it’s like to get ready.

Here’s Steve and Steven Tyler bright morning. Hey Paul. Hey you’re on total lending you.

And you’re watching some training on today. How does your credit score What’s the makeup of your cuts or how did they come up with a credit score. Maybe you don’t know that. Or maybe you’re a consumer and you’re listening on iTunes and you want to know. What’s the make up of my credit score. How did they come up with it now we’ve covered this before but we’ve got Brian our president and CEO here who has been in the mortgage business for like 180 years or something like that I mean a really really long time is that right 21 21 or something like that. Long time. So he knows this stuff. Right. And so I thought it would be very valuable to kind of talk to Brian about how the credit scores made up so we’ve talked about it before that. What 35 percent of your current score comes up with your payment history because if you don’t make your payments that’s bad right. So your score is going to go down. What else. What number is 10 percent of your credit score Tulsa Mortgage.

New credit types different types of credit new credit types of credit new credit is 10 percent different types of credit you have is 10 percent you score and then tiler what represents 30 percent your score you know oh come on Tyler tell us about the amount that you owe.

Oh I thought you already knew that though you knew what it was like the balance of options available credit on some like specific numbers. I don’t know. It’s early. Tyler do you guys these numbers. Was a junior loan officer people.

They’re not they’re not etched in stone every model.

Rather it’s Experian TransUnion or Fair Isaac.

They have a different calculation that they are ever going to tell you their recipe their pay this is kind of like a it’s a general breakdown of what it’s going to be. OK. But the two big things are how do I pay. So I made my payments on time that’s sort of permanent. And then what’s my credit utilization. So if I’ve got and this happens a lot. We have people that maybe they’ve got some $10000 limit on all their credit cards and they’ve got a 90 $900 ounce. They’re like ninety nine percent of their available credit on their credit cards that’s their score is going to come down dramatically because of that because they’ve literally maxed out and it will be even worse if they had a ten thousand one hundred dollar balance. Now they’re over their limits on all their cards right. So your score is going to come down. So were your lender if they’re smart like Tyler can manipulate that score and get the score up is by getting that number of your balance versus available credit down to 21 to 24 percent of the available credit especially on revolving on your credit card stuff because you might see and we’ve seen this plenty of times as much as a 75 80 point increasing in credit score right. Yeah. Just from revolving credit just from credit cards because people don’t listen if you’re buying a house and you don’t care or you’re not doing it you don’t care about where your credit scores at. You’re making your payments on time but you Max everything out. That’s one thing Tulsa Mortgage.

If you’re trying to qualify for the best rate there is some strategy to it. You know if you literally carry balances on your card and just keep a balance all the time then you might want to talk to your lender about taking some of the people that want to put a ton of money down but they’ve got a ton of credit card debt. So hey why don’t you pay off your credit card debt put a little bit less money down and then maybe your credit score go up 80 points and then maybe I can get you a much better interest rate. Right. What’s the difference. Brian on a risk based model and pricing generally between a conventional loan with a 650 credit score or a 760 credit score about 50 basis points spread. So

like Ivey that could be roughly anywhere from eight to a quarter percent in rate. So time 30 years. Right. Right. Which equates you know for simple mathematics.

If you guys are doing math on it a 200 to 1 percent or point 1 to 5 percent of a $200000 loan is $17 a month. So every 8 you go up on a $200000 loan. So every point 1005 you go up in interest rate that’s going to increase that payment $17 a month.

So if you want a quarter then you’re paying $35 a month. Do that math. So thirty four excuse me. So you take 34. Right. Right. Thirty four times 360. It’s $12000 in interest you’re going to pay for the life loan if you stay in there.

Tulsa Mortgage Bigger than that guys. And the biggest part about credit is this is when a borrower comes to you that are coming to you as a professional and let’s say that they have a lot of debt and they want to do a cash out there wanting to you know pay off some debt and do some other things. I don’t know how many times I’ve seen this we’re a borrower come in and the loan officer gives them bad bad information. You know so here’s the deal OK. 50 percent of your credit is based off your credit 50 percent of your credit score. That means that the accounts and the age of the accounts. So let’s do some simple rumen miniature math here. Let’s say a borrower has $10000 with usable credit and he owes $10000 on OK if we do a refinance and we pull cash out we pay 5000 or 10000 now. Now his usable credit is 50 percent right. But let’s say that he had a Capital One card and the loan officer gives him bad advice and he he open the car when he was in college 17 18 years old he’s had it 20 years. And so all of a sudden that accounts one of his oldest accounts so it’s getting a higher score because it’s an older account. Right. But he pays it off and and the loan officer says you need to close that account down so you don’t charge it back up blah blah blah. So he goes in. He closed the count down like the loan officer advised them. Right. So now he’s got $5000 with a usable credit.

We only paid off 5000 because it was 10000 owed. And he closed that account.

So now he has 5000 usable credit 5000 owed. He hasn’t essentially done anything and he got rid of his own account. What do you think his credit score going to do Steve go down go down. Going to go we’re not going to go up. It’s going to go.

Listen every single person who tells you to pay something off and close the account don’t listen to them. I wish there are one hundred instances this year that I wish I would have been able to talk to somebody before they called me because what I have so I am and I’m ready to buy a house Tulsa Mortgage.