Thursday, 01 May 2014 22:23

Ready to Buy a Home? Get Your Credit In Line

Your credit score is going to make the difference between getting a mortgage and forgoing the home of your dreams. Before you buy a home make sure your credit score and credit history is in mint condition.

Check your credit history and determine your credit score.  Obtain a credit report free from Equifax, TransUnion and Experian.  Each website allows one free credit report per year.  You have three free chances to correct any mistakes, stop any signs of fraud or identity report, and clear up outstanding issues with collection agencies.  Some of those free reports report your credit score.  There are websites that will pull up your credit score free also.  If nothing is wrong, continue to maintain that healthy credit score.  If something is wrong...

Contact the company with the error and the credit report companies about it.  Your credit history is vital to obtaining a home.  It must be flawless.  The company will do an investigation to see if the error is indeed an error.  The error disappears if it's a mistake and the credit report companies will remove it.  If it's an error on your end, you must fix the situation before you get too deep in the home search.

Pay a lot down toward home ownership.  A large down payment is going to tempt lenders to give you a mortgage.  They'll have a greater chance of receiving their money back, and you'll have a greater chance of owning your home.

Maintain a good credit score (or build up to a good credit score) by paying bills on time and no extra loans/credit cards. Credit card bills, car notes and other loans are a part of your credit history.  Pay the bill off on time in full as soon as possible.  That includes current, upcoming and past due balances.  No lender wants to take a chance on anyone who has maxed out credit and too deep in debt.  As far as adding additional credit cards and loans be careful.  A new credit card or loan on top of the credit cards and loans you already have will weaken your credit.  It lowers your credit score and your credit average making it less likely to obtain a mortgage.  Wait until you almost secured the home before obtaining new credit.

Lenders are making tougher restrictions for mortgages.  You don't want your credit to be the reason you aren't approved.  Contact us for more information.

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