What to do if your bank closes your line of credit

CNBC reports that Wells Fargo is closing personal lines of credit and no longer offering the product to consumers. In a letter sent to their clients, they state that the closure may impact their credit scores. In my opinion, this really stinks!

If someone has a balance and the lender closes the account, it could be damaging to their credit scores. It’s really not fair when the consumer has done nothing to trigger the account to be closed – it’s simple a decision that the bank (Wells Fargo, in this case) has made. It doesn’t matter if the consumer has made their payments on time or how established the account is, it will most likely cause scores to drop until the debt is paid off.

One option one could take to potentially reduce credit score hit would be to pay off the debt now. This will eliminate having a balance reported on having a “closed” debt with a balance due against your credit. Reportedly, the credit lines being closed by Wells Fargo go up to $100,000.

Homeowners in this situation could look at refinancing to pay off the credit line. This may be an attractive options with how low mortgage rates are currently and how much homes have appreciated. I hope that if you have a credit line that is being closed by a bank that you DO NOT use that bank for a refinance.

If your home is located anywhere in Washington state, I’m happy to review your scenario to see if refinancing makes sense for you. Click here for a no-hassle mortgage rate quote.

‘Tis the Season to not sabotage your credit

Several weeks before the holiday season sets in, we begin to see those commercials I absolute dread. You know, the luxury cars with giant red bows on them…the recipient gushes, “you shouldn’t have!”… and they’re right, the gift giver probably should not have – especially if they’re considering buying or refinancing a home. [Read more…]

Boost Your Credit Score or Boost Your Spam?

Experian, one of the big 3 credit bureaus, has been actively promoting that consumers can “boost” their credit score using their services. Since I help people with their credit and mortgage needs for my profession, this naturally got my attention.

[Read more…]

NEW! WSHFC now allowing Non-Traditional Credit

The Washington State Housing Finance Commission (WSHFC) is now allowing borrowers without established credit (aka “non-traditional”) to qualify for a mortgage.

Here are some of the requirements: [Read more…]

Avoid being naughty to your mortgage preapproval

‘Tis the season to spend, spend, spend give. I love this time of year and I admit that it can be hard for me to not splurge a bit. Overspending doesn’t have to be in the form of extra presents under the tree, it could be getting together with family and friends at a restaurant – or even cooking up something extra special at home. There are endless ways to spend your hard earned cash this time of year whether it’s your savings or using a credit card.

If you’re thinking about buying a home, refinancing or are in the mortgage process, it can be quite easy to forget about your credit or savings during the holidays. [Read more…]

Can you get a Mortgage with Frozen Credit?

In light of Equifax’s recent massive credit breach, many people are going through the process of “freezing” their credit with each of the credit bureaus. This prevents someone from obtaining a new credit account in your name (it does not prevent them from using existing credit). I actually decided to freeze my credit a while back when it appeared that someone was trying to commit fraud with our address. It’s not that difficult to do and it’s pretty easy to forget about…until you decide to apply for new credit, such as getting a mortgage. [Read more…]

Were you potentially hacked from the massive Equifax breach?

Equifax announced yesterday that they’ve were hacked on a scale unlike any we’ve seen potentially impacting half of our population.

From Equifax: “…a cybersecurity incident potentially impacting approximately 143 million U.S. consumers. Criminals exploited a U.S. website application vulnerability to gain access to certain files. Based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017.” [Read more…]

Fannie Mae updates underwriting guidelines at the end of this month

Effective July 29, 2017, Fannie Mae will release DU Version 10.1, packed full to changes to their underwriting guidelines. These changes apply to Fannie Mae conforming mortgages (Freddie Mac has different guidelines). Here are some of updates effective at the end of this month:

50% Debt-to-Income Ratios. [Read more…]