2 Things You Can Do To Prepare For A Home Loan
Many people look forward to the time when they can purchase a house, but when the time actually comes they become frustrated with the process. If you are not properly prepared the process can be exhausting and you could even delay getting approved for the mortgage. Here are some things that you need to do to prepare for your mortgage.
1. Protect Your Credit For A Year Before
One of the most important things you can do is protect your credit before you purchase a house. Your credit score will play an important role in how much your interest will be on the loan. You could save thousands of dollars over the time of the loan by having a lower interest rate.
There are certain things you can do to protect your credit. First, avoid opening any new lines of credit right before you buy the house. With every line of credit you open it will initially hurt your score. Although your score will bounce back, immediately following opening the line of credit it may be lower. This means you should avoid getting credit cards from department stores, buying a new car, financing furniture or anything else that will reflect on your credit report.
Second, don't have your credit pulled with too many lenders, unless you do it in a short period of time. You might want to get the best interest rate so you call multiple mortgage companies. The worry is that if you are doing that over the course of months you will have multiple hard pulls on your credit. This will cause your score to go down. If you do want to look at multiple lenders you should do so within the same short time frame so it all counts as one pull.
2. Save and Get Out Of Debt
The first thing that the lender will look at is your debt to income ratio. If you have a lot of debt it is going to negatively affect the amount you will qualify for in the loan. This is why every dollar you can pay off with your car, credit cards and consumer debt will only help your chances of getting the loan.
Second, save as much money as you can. This is because the lender is not only going to look at how much money you bring in, but how well you manage it. If you have a good savings account you will become a better candidate for the loan.
By doing these things you can be prepared to apply for a mortgage. Contact a business, such as RE/MAX EXECUTIVES PLUS, for more information.