Linda Le - Hawaii Loan Officer

Sometimes lenders can speak their own language. Let's take a quick look at what they closely look at to qualify borrowers. What lenders look at are the Four Cs of credit: Capacity, Credit History, Capital and Collateral.

Capacity - Can the loan be repaid? Lenders ask for employment information: occupation, duration of employment, and amount earn. They also want to know expenses: how many dependents, whether borrower must pay alimony or child support, and the amount of other obligations.

Credit History - Will the debt be repaid? Lenders look at credit history; how much is owed, how often loans are taken out, whether bills are paid on time, and whether borrower live within their means.

Capital - Is there enough cash for the down payment and for closing costs? Does the borrower need a gift from a relative? Will there be a cushion left after the home purchase?

Collateral - Will lender be fully protected if the borrower fails to repay? Lenders must be sure the property is purchased at a sufficient amount in order to back up the loan.

Be sure to tell your Loan Officer everything. Covering up past credit problems will create some bums along the road.

Have a great weekend!

Wow! Yet another change in underwriting guidelines.

Fannie Mae announced that effective June 1, they will require a second credit report to be pulled by the lender.

Why is Fannie Mae requiring this? Fannie Mae is requiring this in order to prevent someone from obtaining several loans (from other lenders) simultaneously on the same property. Pulling a second credit report allows lenders to see whether other creditors have recently requested information on the borrower.

What does this means to Borrowers/Buyers? Borrowers may be affected in that during the course of their transaction, they will be strongly encourage not to charge anything on their credit cards and /or open new credit. Doing so may affect their loan approval, which may affect their closing date.

What does this mean to Sellers and Realtors? Should the buyers do any of the above during the course of the transaction, it will affect the contract dates.

To prevent any major changes in loan approval, borrowers are encouraged to reframe from making any major purchases or opening any new loans. By doing so, it will allow a smooth transaction.

Have a great week!

Can someone give me suggestions on how to direct people to a particular blogs?

Is paying CASH always the best way to go? It depends... paying cash for everything may hinder you from establishing credit. However, there is hope...

You can establish a credit score a few different ways including:

• Showing a rental agreement
• Having your name on a utility bill
• Open and use a secured credit card
• Become an authorized user on someone else's credit card
• Show proof of insurance or a gym membership paid on a monthly basis

For more information on how to build your credit scores, give me a call at (808) 561-5943.

Has the new GFE (Good Faith Estimate) caused confusion for you and your buyers? Just as a reminder, the new GFE no longer shows your clients their estimated cash to close and closing costs that they will be assessed. Instead the new GFE shows the total costs that both parties (buyer and seller) will be paying.