Mortgage regulations have changed significantly over the last few years, making your options much more limited than ever. Subtle changes in the way you approach looking for a mortgage and even small differences in the way you structure your mortgage can cost or save you tens of thousands of dollars and years of wasted expense.

Get the Right Information.

Whether you are about to buy your first home, or are planning to make move up to your net home, it is critical that you be informed about the factors involved. 

Everyday people have their mortgage loans turned down because of one or more credit issues. By taking these next few minutes to acquaint yourself with “The Credit Report: 9 Things You Must Know to Get Approved” you can greatly increase your chances of getting your loan approved at the best possible rate and terms.

1. Know Your Credit Score

Your credit score is an essential component of having your loan approved. In fact, over the past few years it has moved higher and higher in priority to the point that it is probably the number one factor in determining the loan program for which you are potentially qualified. The higher your credit score the better. However no one is perfect and because of this, we work with multiple lenders and hundreds of programs to find the best loan available for your particular needs. We have the best sources for scores at the top.(Over 800) down to the bottom, (Around 450) and are constantly searching for new lenders that can add good programs to help our clients.

2. Always Pay Your Bills on Time

This is not intended to insult your common sense, but to emphasize how vital on time payments are to your credit score. Late payments can dramatically alter the rate, terms and even whether your mortgage loan is approved. Not making payments in a timely manner will always decrease your credit score. While this seems obvious, this next statement may not have occurred to you. You may have credit from several different sources, credit cards, student loans, contracts for appliances, auto loans etc. It is very important that you thoroughly understand the terms and timing of the payments for each creditor that you have. Each creditor has their own separate terms that you signed for and yet almost no one reads the boring fine print when they apply for credit. These terms are not all the same. ie: a mortgage generally has a 15 day grace period. As long as the payment is received by the 15th of the month there is no late charge and as long as the payment is received within 30 days, it is not reported as late to the credit bureau. However, many credit card companies have a due date on the 1st of the month, or 5th or whatever, but if that payment is not in their hands ON THAT VERY DAY it is considered LATE! Watch out!

3. Avoid Collections

Have you ever disputed a bill before? Most of us have. Industry leaders know that it’s almost always better to pay a disputed bill on time while continuing to work on the disputed issues, rather than to have a collection filed against you. You may win the battle only to lose the war. You may win the dispute only to spend months if not years trying to get the collection off your credit records. A collection always leads to a reduced credit score.

4. Limit Your Liabilities.

Loans are approved largely on the percentage of your income that is used to pay off debt and other financial obligations. You can get approved for a larger mortgage and therefore a much nicer home if you have lower credit card, automobile, student loans and other debt payments. Signing and/or co-signing for someone else’s purchase or loan is a definite “no no”, all lenders will treat this co-signing as though it is your debt and add it to your liabilities.
It’s also important to keep your credit card balances at 50% of the credit limit or less.
It is far better to have 2 credit cards, each with a limit of $5,000 and a balance or $2,500 than it is to have one credit card with a $5,000 limit and a $4,500 balance. 

5. Limit Your Credit Inquiries

Another of the factors used to calculate your credit score is the number of times potential creditors have requested your credit report. Each time someone requests your credit report, your credit score goes down ever so slightly. If your score is 800 this doesn’t matter. You could have many requests without doing damage because your score was so high to start out with. However, if your score is 700 and below, each credit report ordered is now damaging your report and eventually could lead to less than desired loans being offered to you. 

6. Do Not Open New Accounts in the Months Preceding Your Home Purchase

Opening new accounts requires the pulling of new credit reports and as noted above, this can dramatically reduce your credit score.

7. Do Not Close Unused Accounts Until the Purchase Has Finalized.

One of the calculations used to determine your credit score is the ratio of the amount of credit you are currently using to the amount of credit you have available to you. The lower this ratio, the better your score. If you have unused credit available to you from old accounts you no longer keep active, leave them alone!!!! Closing these accounts will increase the overall percentage of credit used and therefor lower your credit score. 
On the other hand as I mentioned in #6, opening new accounts to try to reduce your ratio is unlikely to help you because it requires a new credit report to be run and this will lower your score. (Hint…..just leave things alone!)

8. Don’t Try to Hide Your Past Financial Difficulties.

One of the most important services that we can offer you is helping you to overcome past financial difficulties that may hinder your ability to have your loan approved. Banks actually use this information to turn you down…..We, on the other hand, are here to help you get the best possible rate, and terms available to you. We are here to minimize the impact any past financial difficulties may present to you in receiving your loan.
We are on your side and therefore we need to know as much as possible right up front so we can work around the problems. These problems will undoubtedly show up somewhere in the process, so the sooner we know everything, the better job we can do for you.

9. Provide Information That Has Recently Changed.

Not every creditor reports to the credit bureau on a monthly basis. Providing us with up to date information can increase your qualifying ability and decrease your rate.

We hope this report has helped and we look forward to hearing from you soon. Click here to Contact Us.  Remember, Ultimate Service. Ultimate Results. Period