How Being a Transactor or Revolver Affects Your Mortgage

How Being a Transactor or Revolver Affects Your Mortgage

Don’t let a credit card ruin your chances of getting a mortgage.

Did you know that many credit borrowers are considered either a transactor or a revolver? But what exactly do these terms mean and how being one affect your mortgage? Read on to find out!

What are Transactors and Revolvers?

In the credit industry, most people are considered either a transactor or a revolver. A transactor is someone who uses their credit cards and pays off their balances at the end of the billing cycle. A revolver is someone who regularly maintains a balance on their credit cards and incurs fees on them. According to a study by the TransUnion, a major credit bureau, revolvers are three times more likely to default on a new credit card and auto loan than transactors and five times more likely to default on current cards. But someone who actively pays down their credit card balances is considered a less risky investment than people who only pay the minimum requirements. These categories are not only used in terms of mortgages but also by the three major credit bureaus, TransUnion, Equifax, and Experian to help determine what kind of credit cards you can qualify for in the future. But how can being labeled one of these affect your mortgage?

How Can These Categories Affect Your Mortgage?

In September 2016, the trends that are used to predict a consumer’s credit behavior became available for any lender who used Fannie Mae’s Desktop Underwriter system. This software is an underwriting tool that is used in most of the mortgage lending decisions. This may mean good news for many consumers who are hoping to qualify for a home loan. Some responsible borrowers may have a higher score on the trending data than they would have otherwise. This higher score could mean favorable loan terms for borrowers. This new system may also be good news for people who may not have enough credit to generate an actual credit score. This could mean your odds of buying your dream home just improved.

With this new system, a low credit score may not stop you from getting a home. For more information on finding your perfect home with your new mortgage, call Simply Referable today!

Getting a Mortgage with Simply Referable

Together, with your Simply Referable team, you’ll cut the right deal for the right price with qualified guidance every step of the way. Every team member is committed to selling your home and forming a lasting bond with your family. Thanks to our roots in the Maryland/DC region, we can help you find your dream home. Contact us online and give us a call at 410-983-9045. To see some of the stunning homes we work with, follow Simply Referable on FacebookTwitterGoogle+PinterestYouTube, and LinkedIn.