Purchasing/Refinancing a Home with Less-Than-Perfect Credit, WABC-TV Eyewitness News, 4/4/04

Date April 04, 2004
Time 07:00 AM - 08:00 AM
Station WABC-TV (ABC) Channel 7
Location New York City
Program Eyewitness News

JOE TORRES, co-anchor:

If you are one of the millions of Americans shopping for a good mortgage, listen up. Getting a low interest mortgage to purchase or refinance a home can be easy if you have a good credit history. But there is still hope for Americans who have less than perfect credit. Joining me now is Bob Moulton, president of the Americana Mortgage Group. Good morning, thanks for coming in.

Mr. BOB MOULTON (President, Americana Mortgage Group): Good morning, Joe. Thank you for having me.

TORRES: I would assume first and foremost right at the top of the list, get a copy of your credit report.

Mr. MOULTON: Get a copy of your credit report, review it line by line. A lot of times the creditors that provide information to the credit reporting agencies do have inaccuracies and over the years you need to review it on a regular basis. If it is inaccurate, get in touch with the creditor right away.

TORRES: How do you do that? Just pick up the phone and tell them that it is wrong?

Mr. MOULTON: You contact your mortgage broker or contact the credit reporting agency. There are three major credit reporting agencies; TransUnion, Equifax and Experian. Get the credit report and on there will be the phone number and the address of the creditor that is reporting. If there is a problem, pick up the phone, give them a call. Make sure you have some documentation, it always helps.

TORRES: Is it important to get the credit report from each agency?

Mr. MOULTON: Absolutely. Different lenders report to different agencies. One lender might report to one agency and might not report to another. So, just to be as complete as possible, get it early in the process before you want to apply for a mortgage. Give yourself a month's advance review.

TORRES: If your credit report perhaps wasn't as good as you would like it to be, do you want to be upfront with your mortgage broker?

Mr. MOULTON: Absolutely. You want to be as honest as possible. The truth always works. There could be extenuating circumstances. There could be separation, illness, job loss, it could even be a change of address. A lot of times when I review a credit report, a person would not have received a bill if they moved and simply due to a change of address they could have prevented a late payment on a credit report.

TORRES: What will that honesty do if, in fact, you were still late?

Mr. MOULTON: We will look at the whole credit profile and if there is a majority of good credit and extenuating circumstances where one item might be late...

TORRES: For that time period?

Mr. MOULTON: Just clean it right up. It's not very difficult.

TORRES: You say, start paying your bills on time if that had not been your practice before.

Mr. MOULTON: Well, you know, a lot of people might feel they are in a cash flow crunch and if they are, pay the minimum payment. Or if they have a problem making a certain minimum payment, contact the creditor and work out a payment arrangement. It will always be better on your credit report to do it that way.

TORRES: Do they look if you have made a pattern in the last few months of paying your bills on time that that is an indication that you are on the right path?

Mr. MOULTON: We will look at the last few months and we will look at the last couple of years. We will look at if there was an extenuating circumstance at a certain period of time, we will look and see if it is out of character for that particular individual.

TORRES: Close extra credit card accounts. Do you find that some people, to this day and age, still have six or seven credit cards?

Mr. MOULTON: Well, a lot of times there are promotions offered by the credit card company. It could be very low interest rate, it could be frequent flyer miles or it could be free gifts. A lot of times clients will transfer balances from one credit card to another and not close out the old credit card. So, that could work against you depending on the lender particularly when you are applying for a home equity line of credit.

TORRES: Ideally, how many accounts do you really need to have?

Mr. MOULTON: Keep the ones that you use. I can't see people really needing more than a half-dozen credit cards in this time now.

TORRES: Two is good. Rates are low now, right?

Mr. MOULTON: Rates are great. We are in the low fives 30-year fix, no points.

TORRES: There you go, short and sweet. Bob Moulton, president of Americana Mortgage Group. Good stuff. Thank you.

Mr. MOULTON: Thank you, Joe.