Is Your Credit Ready for a Home Mortgage Loan?

June 9, 2017 6:31 pm Published by

home mortgage loan

When you’re a first-time homebuyer, there are a lot of things that you just don’t know. It isn’t your fault. You’ve just never needed to know all the ins and outs of homebuying and what goes into getting a home mortgage loan, such as your credit score. It’s best if both the credit scores of you and your partner are in tip top shape. Here are a few tips to make sure your credit is ready for a home mortgage loan.

Check Your Credit Reports

First and foremost, you need to check your credit reports to make sure there’s nothing damaging on there. There are three credit reports your lender could check – Equifax, Experian and TransUnion. Since you don’t know which credit score your lender will check, it’s best to take a thorough look through each of them. You can get a free copy of each of your credit reports at annualcreditreport.com. You can also keep a constant eye on your credit through mobile apps like Credit Karma.

Dispute Any Inaccuracies

Inaccurate information on your report can really hurt your credit and your chances of getting approved for a home mortgage loan. Regardless of whether you have physical proof of the mistake, you should dispute it with the credit bureau.

Pay Off Delinquent Accounts and Bury Them with Timely Payments

If you have any delinquent accounts including any late accounts, charge-offs, bills in collection and judgments, you need to get those sorted out. You then will need to re-establish a pattern of timely payments that will show to your lender that you will be a responsible borrower.

Reduce Your Debt-to-Income Ratio

You need to be able to show your lender that you will be able to pay your mortgage every month, and it’s hard to do that if you have a high level of debt relative to your income. Ideally, you want your monthly debt payments to be no more than 12% of your income.

Check Your FICO Score

Since your FICO  score is what’s used by 90% of lenders whether it’s for a car or home mortgage loan, you’ll want to know what it is before you start applying. You ideally want your FICO score to be at least 720 to get a good interest rate.

If you’re ready for a home mortgage loan and to buy one of our new homes in Kyle, TX, contact Crosswinds today! We can’t wait to tell you all about our master-planned community.

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