Tulsa Mortgage : Podcast 28 – Part 2
Tulsa Mortgage It ain’t happening. It’s like you’re not going to get a perfect credit score, If you don’t have all the credit and if revolving debt represents 30% of your score and you’re one of those people who are just like,” I just don’t do credit cards. I don’t, I’m just not going to get in debt I won’t use credit cards.” Well look here’s the thing, it’s 30% of your score so when you’re looking at your credit score and you’re going,” Why can’t I have a higher credit score.” What’s the reason Tyler?
Tyler: They don’t have everything they need.
Steve: You don’t have revolving debt; it’s 30% of your score. You don’t have a credit card, go get one, use it responsibly, don’t be an idiot, use it responsibly. Just because you get a credit card doesn’t mean that you’re going to get in debt. You just have to use it responsibly. Get one of the $500 limit, that’s a really cool thing. It’s as compared to your limits. That’s how they do it so it 30%of your score, but how do they derive it Tyler? They derive it by what’s your limit, what’s your balance.
If your limit is between — is 1,000 bucks, then your balance needs to stay between 210 and 230 bucks roughly. That would put you between 21% and 24% of your available credit. That’s how you’re going to get the optimum score. Nothing wrong with that okay, nothing wrong with that, because you’re going to get the best score. Now you take that out of the picture and you have no revolving debt, your score’s not going to do well, it’s just not going to. If you have a revolving debt, It’s okay. You’re maybe going to pay a little interest. You can also just pay the thing off every month. Buy gas groceries and just pay it off. The reason people get into trouble is because they start paying for everyday things that they would normally would have paid for out of their paycheck with their credit cards and then they blow the other money, right?
Steve: I’ve been guilty of that, everybody has. I was young and dumb and I got me a credit card. Went charged in it, didn’t get me a Tulsa mortgage because of it. Because my credit was messed up. I don’t know I went straight country right there. I don’t know why. Did I sound country?
Tyler: A little bit.
Tulsa Mortgage Steve: I’m going to stop doing that. Let’s talk about a guy we just closed, because one thing that we did with this gentleman is we added revolving, so we just talk about that. He was — this is crazy what this did okay because he was a low credit score VA buyer okay. When I say low he was below 620, and so below 620, we can get done in fact we can – we say we got under 5A just because it’s truly expensive. In his case, he was at — his interest rate was in the mid fours with sub six credit scores so a little above that mid four at a cost right of one point in origination and two points in discount just to get that. We can even give him a higher rate.
It was a 200,000 loan 195 actually, 195,000 and he was paying $6000 in discount basically just to get that higher rate that he got. Now, we prepared him, had him go open really easy. We went opened a Capital one credit card online. He got a %500 limit. He charged gas and groceries on and then he went out and started looking for a house and two weeks maybe a week before he closed, we re-pulled his credit and it was amazing because guess what happened, his 613 turned into a 647. His cost of $6000 went to zero. His interest rate went from 4.625 to 3.875 APR. I don’t think I was supposed to see rates on here, but anyway this is an example. That’s not rate we can offer, but his interest rate went down by point .75%. His payment went down. The amount he needed the seller to pay in closing cost went down so in fact what we did is we used some of those closing costs we already had to get him a lower rate where before we were having to use them just to get him a higher rate, all because he did what?
Tulsa Mortgage Tyler: Opened up a credit card.
Steve: Opened a credit card. %500 limit actually it might have been $300 limit. It was small, one card, that’s all he had. This guy now he’s going to have a mortgage reporting to this credit and in a year the on time payments on that credit card, the on time payments on mortgage he won’t have a pummels credit.
Tulsa Mortgage Steve: He’s not going to. You know what good for him he’s a veteran and he deserves it. He’s actually a disabled veteran. He gets VA benefits and he was exempt from his — he was exempt from his funding fee because from VA because he’s a disabled VA. So that’s a perfect example of how you can use revolving credit to benefit you. A lot people don’t. Honestly, here’s the deal, had we not had him go get that card, we won’t be talking about this. We’d be — we would be calling him in six months to a year to re-finance him and he would have those expe — it be worth it, but he’d have those that expense you know Tyler to refi-. When — that’s just right there’s just farm logic. You don’t have to be a genius to figure that out. Do you Tyler?
Tulsa Mortgage Steve: Talking about that gentleman just understand revolving plays a big part in your accounts. We’re talking today about making on time payments on all your cards while you’re in the process especially mortgage. We threw a little tidbit in there about opening up some revolving, if you don’t have it because it can really affect your credit score. One of the things that I thought would be a good little action step. This is a – did we really have transformers before?
Tyler: Yes, I think we did.
Steve: What happened to our transformers thing?
Tyler: I don’t know.
Tulsa Mortgage Steve: Because that was like putting it down bro, the transformer sound. Well I got t move my Facebook live to see if it’s in there. No, we don’t have it. I don’t know what we did with that. Was it under mystic statistic? Pretty amazing people. I’m trying to figure out a place to set up live Facebook and it’s not really exactly working. Okay that’s good. This is an interesting thing. This transcends everything okay; you can use this for anything okay. This is going to blow your mind. Okay are you ready? All right Tyler, this is my idea of how to make sure that you don’t miss any payments while you’re on loan process. Are you ready?
Steve: I’m going to blow everybody’s mind. Make a calendar reminder. I wish I could take the mic off the mic stand and drop. When do we ever drop the mic sound? Make a calendar reminder. Wow, that’s amazing. I got a 17 year old that I wish would just make calendar reminders for everything. He needs it. By the way he went back to work last night at 7:00 o’clock, 6.30. Because after washing the windows, he completely forgot to do everything else. He washed my car.
Tulsa Mortgage Forgot to take pictures of my car, washed the windows and, didn’t do the trash, didn’t do anything. “Do you want me to go back up there?” Absolutely, that kid needs a calendar reminder and so do you if you’re going to miss your payments. Look, it’s really easy, go into the iphone or android or whatever it is that you have and make yourself a reminder to make the payment. Or, here’s an idea, most credit card companies and any kind of company has alerts that they can — you can put on your cards to make sure you pay them. That’s a great idea.
Tyler: That is.
Steve: What do you think about that?
Tyler: I like it.
Steve: I’m pretty smart, I think. I think that’s pretty much all I have for today. Literally, don’t be relying on any open credit cards, open a revolving if you can, it’s not bad. Set yourself a reminder for your bills and you won’t be late. Can we be any better than that Tyler? What do you think?
Tyler: Nailed it.
Tulsa Mortgage Steve: Nailed it. stevecarington.com and Tyler Wyburn with the Steve n Tyler show. We’re out. See you people.