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Posted by Sgt.Sausage on October 13, 2006, 2:34 pm
>
>> I don't think they'd even know income. How, exactly, other
>> than obtaining your private IRS tax forms, would they even
>> begin to know your income?
>
> That's an easy one to answer: When you apply for a mortgage or a car
> loan (and other types of loans), you are asked to provide your income.
Well ... yeah. That's the *mortgage company* asking you
for your income (and supporting docs) that you are agreeing
to supply them.
My question still stands: How, exactly, other than obtaining your
private IRS tax forms would they [THE CREDIT REPORTING
AGENCIES -- NOT THE MORTGAGE COMPANY]
even begin to know your income.
> Therefore, this information is available to lenders, who in turn report
> to the credit reporting agencies.
Not without your permission or authorization, which is not
a common request on anything I've ever signed with a
mortgage company.
> I am NOT saying that lenders always
> or routinely report income to the credit reporting agencies (I don't
> know one way or the other), but, that is one way that they would or
> could know.
Again, not without your authorization.
.
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Posted by Don on October 6, 2006, 12:01 pm
On Wed, 4 Oct 2006 16:13:45 -0500, wangchieh@wongfaye.com wrote:
>Does your income have an affect on your credit score? Or does only
>your credit behavior affect your credit score?
>For example:
>John makes $120,000 a year, has an excellent credit history, and has a
>score of 820.
>Gary makes $45,000 a year, has the EXACT same excellent credit history
>as John. Can Gary get an 820 credit score too? Or will his score be
>lower because his income is less?
That is an interesting question. It can be interpreted in different
ways. In your example, the answer is "No," provided particular lenders
did not fiddle with the scores in some way for their own purposes.
However, if you randomly selected 1000 people from the general
population, you would find that people with higher incomes would tend
to have higher credit scores. For one particular person, income would
not be an added factor in calculating the score from the numbers
available. But income would be a strong influence in determining the
numbers in the first place, that is, what one's credit history
happened to be, whether or not previous loans were repaid on time, and
so on.
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Posted by on October 6, 2006, 7:35 pm
Don wrote:
> On Wed, 4 Oct 2006 16:13:45 -0500, wangchieh@wongfaye.com wrote:
>
> >Does your income have an affect on your credit score? Or does only
> >your credit behavior affect your credit score?
> >For example:
> >John makes $120,000 a year, has an excellent credit history, and has a
> >score of 820.
> >Gary makes $45,000 a year, has the EXACT same excellent credit history
> >as John. Can Gary get an 820 credit score too? Or will his score be
> >lower because his income is less?
>
> That is an interesting question. It can be interpreted in different
> ways. In your example, the answer is "No," provided particular lenders
> did not fiddle with the scores in some way for their own purposes.
> However, if you randomly selected 1000 people from the general
> population, you would find that people with higher incomes would tend
> to have higher credit scores. For one particular person, income would
> not be an added factor in calculating the score from the numbers
> available. But income would be a strong influence in determining the
> numbers in the first place, that is, what one's credit history
> happened to be, whether or not previous loans were repaid on time, and
> so on.
Do lenders check your income when you apply for a home loan? First time
home buyer, starting to make preparations. Thanks.
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Posted by joetaxpayer on October 6, 2006, 7:56 pm
flagsposters@gmail.com wrote:
>
> Do lenders check your income when you apply for a home loan? First time
> home buyer, starting to make preparations. Thanks.
>
If you want the best rate, and you have a good FICO score, the answer is
yes, they should check. I bought and sold some properties, and
refinanced the house I am in now. In the house 10 years and on my 4th
mortgage. Each refi dropped the rate as well as the length of the
mortgage. Anyway, I have, at the ready, 3 years' tax returns, they
usually ask for two depending. Also two years of bank records, to show
where the money for the deposit came from. And last two pay stubs. They
may or may not ask your employer for 'verification'.
Given the anomaly of inverted yield curve, the 1 year adjustable would
be 5.00% (the 1 yr rate) + 2.75% (the common adder) = 7.75% full rate.
Anything lower is a teaser rate and would likely adjust up at the end of
the first year. Standard 30yr fixed are still in the low 6% range. Shoot
for no closing cost, no points. That way if rates drop, you can
re-finance to a lower rate. There's more room for rates to rise than
drop though, so I do recommend staying fixed.
If your mortgage payment is more than 28% of your monthly gross, and/or
your total monthly payments are over 36%, you may not qualify, or you
may get offered a higher rate. I'll get off my soapbox now.
JOETAXPAYER.COM
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Posted by Don on October 6, 2006, 8:27 pm
On Fri, 6 Oct 2006 18:35:44 -0500, flagsposters@gmail.com wrote:
>Do lenders check your income when you apply for a home loan? First time
>home buyer, starting to make preparations. Thanks.
Yes, they do. Sometimes they ask for tax returns going two years back.
But keep in mind that different lenders have different priorities. Put
it this way: Income does not determine the FICO score, but lenders
consider other things besides that score, including income, in
deciding whether or not to approve a loan. More important usually is
the price of the house relative to your income and what other monthly
payments may be eating up your income.
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