Keep Track of Your Credit Score

Credit scores and credit activity play a key role on mortgage approvals. Most lenders require a minimum credit score of 680 (620 for FHA mortgage loans) ñ and if your score falls below 680, lenders can deny your request for a conventional mortgage loan.

Missed or late payments and other negative credit information can also stop mortgage approvals. Always remember to pay your bills on time, lower your debts, and stay on top of your credit report. If you are diligent about cleaning up your credit history and fixing errors on your credit report before applying for a mortgage loan, you stand a much better chance at getting a greenlight from mortgage companies.

Sites like Credit Sesame, and Wallet Hub allow you to check your credit report for free.

Save Your Cash

Requirements for getting a mortgage loan are often dynamic, but you can be rest assured that no matter what, some form of cash will be required during the home purchasing process. Down payments arenít the only expense you need to worry about, eitheróthereís also closing costs, home inspections, home appraisals, title searches, credit report fees, application fees, and other expenses. Closing costs are roughly 3% to 5% of the mortgage balance ñ paid to your lender before they hand over your key.

Stay Employed

This may seem intuitive, but you would be surprised how of my clients up and left their job just weeks before the big day. In many cases, they were unable to close on their loan.

Keeping your job while youíre going through the home purchasing process is crucial. Any changes to your employment or income status can halt or delay the process.

Avoid New Debt

Again, another tip that seems like a no-brainer, but you would be surprised. Iíve worked with clients who financed boats, cars, and even a tractor tailor in the days leading up to closing on their loan. If youíre tempted to finance a large purchase, just say no!

The good news is, you donít need a zero balance on your credit cards to qualify for a mortgage loan. However, once youíre approved for a mortgage with consumer debt, itís important to avoid new debt while going through the mortgage process. Lenders re-check your credit before closing, and if your credit report reveals additional or new debts, this can stop the mortgage closing.

Get Pre-Approved Before House Shopping

Seriously, time is precious, and so is peace of mind. Why waste your time and a realtorís if youíre not even sure if you can qualify for a loan? And why find the perfect home, only to stress over how you can afford it?

Getting pre-approved also keeps you from looking at homes that you know you canít afford. Youíll know exactly what you can spend before bidding on properties, and you wonít fall in love with a house that whose price wonít love you back.

Your pre-approval will include everything from how much you can afford to the interest rate youíll pay on the loan. The lender prints a pre-approval letter for your records, and funds are available as soon as a seller accepts your bid. To get pre-approved, simply apply online.


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