1. Pay off credit cards
If you have a lot of credit card debt, lenders will most likely think twice before offering you a mortgage. Make more than the minimum payments on your cards each month to pay them down faster. This will boost your credit, lower your debt, and will save you money on interest. It also lets lenders know you take your debts and the repayment of your debts seriously.
2. Get your credit reports and check for errors
Mistakes happen. Get free credit reports online from the three major credit bureaus, TransUnion, Equifax and Experian, and go through them to check for errors. If you come across an error, file a dispute as soon as possible. After submitting the proper paperwork, the credit bureau will contact the source and the claim will be investigated within 30 days.
3. Stop applying for new credit
Hold off on applying for any new credit cards and auto loans until you’ve locked down that mortgage. You want your credit report to look clean as possible when you send in your application, and many new inquiries may make lenders uneasy.
4. Look with purpose
Look for mortgages with the best rates, but don’t search too long. After about a month, your FICO score may start reflecting your applications as separate inquiries, which could damage your credit score. If possible, get pre-approved for a mortgage before looking for a house, so that if you do find the home of your dreams, you won’t have to worry about getting approved for a loan later.
If you’re in the market for a mortgage in the Joplin, MO area, please contact our agents to see what your options are and how we might help you.