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Credit Tips Before Applying For a Mortgage

Ready to Buy a House? There's More to it than a Credit Score

Mortgage lenders are not only looking at your score, they are factoring in the items and activity on your credit report. If you're looking to get a loan, it's best to know the latest trends and learn as much as can about the process.Here are a few tips to help you get started:

  • Before you pay any collection company speak with a mortgage lender first. In some cases, credit scores can drop when you pay the balance of an owed collection. Wait until the mortgage professional directs you to take a course of action.

  • Keep your credit card balances low. It is recommended that you keep your credit card use under 30% of the credit limit ( $1,000 limit 30%=$300). Credit Card balances can effect your score tremendously sometimes more than 70 points.

  • Pay current bills on time. Once you're pre-approved for a mortgage loan you must continue paying your accounts on time. During the final process of a mortgage loan, the lender views your credit report again to check for any negative changes. If there are negative changes the lender may decline the final approval process.

  • Shop around different mortgage lenders. Different mortgage lenders have different programs, rates, etc. If its your first time buying a home you may even qualify for a first-time home buyer program. Some lenders offer this, with some programs requiring no down payment.

  • Check to see if your loan requires Private Mortgage Insurance (PMI). Some mortgage companies, especially credit unions, do not require a PMI which can help decrease the cost of the monthly payments on a mortgage.

To get more helpful tips, follow us at @valiantcredit850


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