New Homebuyer Financial Musts: Credit
It is certainly a big step to purchase a home which for most people will be the biggest investment they make in their lives. If you want to live in a community for a long time to come, then buying a home makes more financial sense than renting.
In order to qualify for the best mortgage loan possible, you’ll need to have your finances all in order. Among the many new homebuyer financial musts are having the necessities in good shape so that your loan will be large enough to cover the home you want to purchase. The lender is going to consider the following:
– Annual Income
– Credit History & Credit Score
– History of Making Payments
– Debt to Income Ratio
All of this information will be considered right away, so you will need to have everything in order first if you want to get the loan you’ll need. What follows is a checklist of what you will need to have ready for the mortgage lender.
Pay Bills On Time
This simple advice will help keep your credit score up because the consumer reporting agencies are very quick to apply reports of late payments to your credit report. So, make your payments on time and early whenever you can to keep your credit score up.
Accurate Credit Report Information
There are three consumer reporting agencies, Equifax, Experian and TransUnion which provide your credit report. You’ll want to check each of them to ensure that the information is accurate and free of negative information that drags down your credit score. If you find any inaccuracies in any of their reports, you’ll want that corrected as quickly as possible. The Federal Trade Commission (FTC) offers guidelines to how to report to each of these consumer reporting agencies in order to make the appropriate changes. It is common for one of the agencies to have something wrong so make sure to check all three (Websites like www.creditchecktotal.com will allow you to see all three reports). Having an accurate credit report is one of the new homebuyer financial musts you’ll need to get your loan.
One-Third Rule
When you approach your limit on credit cards, the consumer reporting agencies may take into account that you’ll have trouble repaying debts which can negatively affect your credit score. While credit cards are important to establish good credit, you’ll want to keep your debt on them to around one-third or less of the total credit limit.
In Conclusion
These are just part of the new homebuyer financial musts that you will need to keep track of when applying for a mortgage. If you watch your credit closely you will get a lower interest rate and a higher approval amount. Lastly, having a good loan officer to process your loan is equally as important as your credit, income, history, and debt to income Read more here
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