Merged credit reports are particularly common in mortgage lending. Because there are three major credit reporting bureaus, it’s possible that pulling a report from only one or two of these companies may not show a complete picture of your financial situation. By utilizing a merged or tri-merge credit report, mortgage lenders can access all of the financial information you have on file which helps the lending bank to decide the specific terms of your home loan or whether to even offer you a loan at all. This merged credit report can be obtained from any of the three major credit bureaus and will only contain the same information that is already shown on at least one of your credit reports with Experian, Equifax or TransUnion.
Lenders occasionally charge an origination fee as a way to
compensate themselves for generating the loan itself. Not only is this done as
a way to cover their own expenses related to creating the loan, but it is extra
money for them on a loan that may be potentially risky. In other words, it is a
way to add extra interest on the loan itself.
Most loans that do include an origination fee in the United States range between 0.5% to 1% of the total principle of the loan. This is a big way that the lender collects money for the work that they put into a loan on the front end. They will also be compensated via the interest payments over the life of the loan, but this is a great way for them to capitalize on some return immediately.
A jumbo loan is a loan that exceeds the bounds of a
traditional loan for one’s mortgage. There is a cap in most counties in the
United States of $510,400 for a mortgage loan, but some people need more money
than that to purchase the home that they want.
These loans are not backed by Freddie Mac or Fannie Mae, and that makes them considerably more risky for the borrower. That being said, the only people who can and should apply for a jumbo loan are those who have considerable income and resources.
The required credit score for this kind of loan is at least 700, but it can be as high as 720 depending on the exact lender and the preferences that they have regarding who they lend to. Only highly qualified buyers need apply.