If you have come to a point in your life where you are thinking of home ownership, you want to make sure you do everything you can to ensure you are approved for a home loan and to get a good interest rate. The tips provided in this article will help you get yourself in a better position before you go in to see if you qualify for a home loan.
Check your credit reports
The first thing you want to do is make sure you know exactly what is on your credit report. You want to order a report from all three credit reporting agencies. Go through everything on each report and make sure it is accurate. If you find anything that's not correct, you want to dispute it with the credit reporting agency.
Pay down your bills
If there are any past due bills on your credit reports, you want to pay them off and get the accounts in a current standing. This is going to help you bring your credit score up and it will bring down the amount of your total debt which can help you to qualify for more.
Start saving as much money as you can to put down toward the down payment. Having a larger down payment will help you look better to a lender. Also, the more you put down upfront, the lower your monthly mortgage payments will be.
Don't open any new accounts
You want to avoid opening any new lines of credit when you are thinking of applying for a home loan. A credit company will run your credit and this will put an inquiry on your credit. Too many inquiries will lower your credit score. While you may think a new line of credit would help your score, it can go the other way at first and bring your score down right before you were planning to see a lender.
Don't be late on any payments
You want to avoid having any late payments before you go in to see a lender and during the process. If a recent late payment happens to hit during the period when you are in escrow for a home, it can cause the loan to fall through at the last minute.
Following these tips will help you look better when you go in for a home loan and increase your chances of getting it. Contact MCS Bank for more information.Share