Obtain Your Credit Reports
It’s vital you gather credit reports from the three major bureaus and review them.
Nearly 40% of credit reports have errors, so you’ll want to get those corrected ASAP.
Credit Utilization and Standing
Try to get your credit card balances and outstanding bills low or paid off prior to apply for a mortgage.
You’ll want to avoid changes/marks on your credit as much as possible before applying, so try to reduce opening/closing accounts.
This is your most useful tool in the process. The more you can pay up front, the more likely your approval, and of course, it means lower loan/payments.
If you have a great credit score, you’re likely to get approved either way. But if you are a first time buyer or have less credit, the down payment is the main factor in the approval decision.
Consistency is really important with your income.
That said, don’t change jobs or quit prior to applying for a mortgage.
They don’t necessarily affect approval or denial of a loan, but do affect monthly payments. Interest rates may fluctuate during the approval process, as well.
So if you feel they may rise, you can pay a fee to “lock-in” to
It’s important that you plan for additional costs, specifically closing costs, as well as others.
So avoid major purchases that could harm bank balances.
Price Ranges and Debt-to-Income
To understand what you can afford, it’s vital you determine your debt-to-income ratio.
Sound too complicated? Have Questions? You don’t have to go it alone. Our loan officers are ready and eager to help you.