Your Mortgage: The Pre-loan Approval Process
Advice from the Experts, Pitfalls to Avoid
One of the most important steps in the process of purchasing a home is your credit. Your credit score and past history play a very important role in getting pre-qualified and finally pre-approved for a mortgage. A stronger credit score shows lenders that you have a good payment history whether on a past mortgage, credit cards, car payment or any other outstanding loan. In addition, lenders offer better rates to those with higher credit scores.
Your credit score and past history is maintained in your credit report. The three major credit bureaus are Experian, Equifax and Transunion. Contact these bureaus and have a copy of your credit report sent to you. If you need to repair your credit there are legitimate companies that specialize in this area.
Tips to Having a High Credit Score
- Pay your bills on time. If you pay past the deadline this is immediately reported to the credit bureaus and your score goes down.
- Think ahead if you are planning on purchasing a home review your credit 2-3 months prior to applying for a mortgage. This will give you time to correct errors on your report.
- Maintain small balances on your credit cards. Hint!! don't have more that 40% of your credit limit as a balance at any time.
- Do you receive offers in the mail? Credit card companies or other vendors offering you low rates? Before they will give you a credit card they will check your credit. Every time this occurs it is a mark against you.
The process of securing a home loan can sometimes seem daunting and confusing, I can help. Please contact me and I will assist you through the necessary steps and remove your concerns.