Credit has always been a significant factor in the home ownership process. Recent events have put that under a microscope and we must take notice of what it all means.
The shock to the mortgage industry and many of the programs, pricing, and support services have made credit and credit risk profiling, more of an issue than ever before! You just have to look at Chase raising their minimum credit score requirements to 700. Follow that up with PennyMac not purchasing loans with scores under 680. The huge increase in cost and overlays for loans with lower credit scores, forces us to really look at the importance of credit, and the total cost associated with scores that run below average, and the huge benefits of having scores over 750. This is important, because what if this is a sign of the new “normal”?
Here are some thoughts about what to do and how to serve and create a better quality experience and opportunity!
Good to great credit scores are now a requirement of the future.
Chase went to 700 minimum scores, Penny Mac went to 680. Those that are lower are charging more. What is the real cost, mortgage, PMI, insurance? There are huge educational opportunities with partners.
Financial literacy can lead to generational change.
Nobody is born with bad credit. Education is critical; remember the “First in family”. It’s not just credit but savings short and long term. Look to your Realtors, Accountants, Financial Planners, Credit counselors, Attorneys, and Insurance professionals can all help with powerful educational videos full of information.
I have covered these in greater detail in my monthly coaching call last Tuesday, I am pushing the industry as hard as I can to take financial literacy seriously and to help serve our people and our communities to a better life by managing their credit and to fully understand the costs of a bad score and the benefits of a good one!
Please take a minute to go to my YouTube channel; Improve My Tomorrow Coaching; subscribe, comment, and share the material you find helpful!
As always, questions and comments: [email protected]