Let’s face it, you don’t buy a house every day. Even if this isn’t your first time, you want to be sure to avoid any surprises that might affect your chances of being approved for a mortgage loan. Here are five things you can do to prepare and avoid anything that might slow down the approval process and put your dream home at risk.
1. CHECK YOUR CREDIT REPORT
To get a combined report from the three primary credit bureaus – Transunion, Equifax, and Experian, go to freescoreonline.com. Review the report for any inaccuracies. Look for accounts that don’t belong to you, or have outstanding past-due bills you know have been addressed. Instructions on how to request changes are here as well.
2. ELIMINATE DEBT WHEREVER POSSIBLE
Take a close look at your monthly income in comparison with your spending. Identify an area where you could cut back. Ideally, your monthly expenses should be no more than 29% of your gross household income. Use this opportunity to review and tighten up your household budget.
3. SAVE FOR YOUR DOWNPAYMENT
Paying down credit cards and other debts enables you to begin saving for that all-important down payment, the more money you’re able to put down upfront the more home
you can afford and/or the more manageable you monthly mortgage payment will be.
4. AVOID ANY ADDITIONAL DEBT
As you get closer to applying for a mortgage you want to avoid opening new credit card accounts or making large purchases, such as a car, loan that affects you monthly cash flow and could raise a red flag with a potential lender. Avoiding new debt is even more critical during the application approval process itself as any change to your overall financial situation will require updating documentation for underwriting, all of which could jeopardize your final approval.
Ideal Lending Solutions has locations across the great state of Florida to assist you.
*AFN is not a credit repair agency and provides no credit repair services.
**AFN is not a tax or financial advisor, and individual tax circumstances may vary. Please consult a licensed tax professional and appropriate government agencies to determine the tax consequences of homeownership.