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.
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