Have you ever heard of a Residential Mortgage Credit Report? Well if you haven’t, then it’s time for you to listen up. Because if you’ve ever applied for a mortgage loan, or if you are planning on applying for one in the near future (or anytime in the future for that matter), then these residential mortgage credit reports mean a whole lot to you.
What are residential mortgage credit reports?
So if these residential mortgage credit reports are so important, then what the heck are they? Simply put, they are a culmination of your other 3 credit reports. They are compiled by third-party companies, and they are ordered and used by mortgage lenders when determining whether or not to lend you money for a mortgage loan (and what type of interest rates to charge you on that loan).
How are residential mortgage credit reports different than normal credit reports?
Residential mortgage credit reports are a combination of all three of your credit reports. Here’s how it works: a mortgage company is taking on a huge risk when they choose to lend to you. There is a lot more money at stake with a home loan than with, say a credit card or even a car loan. So these mortgage companies want to get access to as much information on you as possible when they are determining whether or not to take you on as a risk. So, unlike credit card or car loan companies who only order one of your credit reports, mortgage companies want access to all three of your credit reports (from all three of the major credit bureaus: Experian, Equifax, and Transunion). And if you are applying for a loan with your spouse, then they also want access to all three of their credit reports.
But that is a lot of information for them to look through. And a lot of this information across those 3-6 different credit reports (depending on if it’s one or two people applying for the loan) ends up being duplicate information. So sifting through all of the information in all of these credit reports can be very time consuming for the mortgage lenders.
Introducing the Mortgage Reporting Company
That is where these third-party companies come in. These third-party companies, called “mortgage reporting companies,” order copies of all three of your (& your spouse’s) credit reports. They then go through the process of going through these credit reports and then combine and condense all of the information found in your reports. This consolidated report that they provide your mortgage lender with is what is known as your Residential Mortgage Credit Report
This much smaller credit report, aka your residential mortgage credit report, or RMCR, is what mortgage lenders use to determine whether or not they will lend to you. It is also what they reference when determining what interest rate to charge you. Instead of having to look through pages and pages of credit reports, many of which will have duplicate items on them, your mortgage lender is now able to have a much smaller, but still comprehensive report to look at for you and your spouse. This makes the lending and decision-making process a much easier one for them.