Remember our blog post about the first thing you should if you’re thinking about purchasing a home? If not, you can review it here. The sum of the article is the first thing you should do is talk to a Mortgage Lender.
There are 3 main reasons for this:
- Competitive offer. Home inventory is low right now so to craft an attractive offer you need to make sure that the seller knows that you’re serious. A good way to do this is to get pre-approved in order for the seller to know that you can afford the home and are ready to begin the mortgage process as soon as an offer is accepted.
- It keeps you in perspective. Why look at and fall in love with a home that’s $300,000 only to find out that you can’t afford it and can only afford $225,000. No other home will compare and you’ll be heartbroken. On the other hand, you may be surprised at what you can get approved for and can afford higher than you thought.
- It will set you up for the future. The lender may tell you that you can’t get qualified right now, but they’ll also tell you why not and what you can do about it.
This brings me to today’s Tip Tuesday….Get Your Credit Ready!
The Spring and Summer real estate market is on its way and you’re excited about potentially buying a home! But, can you?
- You might be worried that your credit isn’t in the shape it needs to be to get pre-approved for a mortgage.
- Or you may not know if your credit is in the shape it needs to be.
- Or you may have good credit but want to improve it to get a better interest rate.
So what can you do today about it?
1) Find out what’s currently appearing on your credit score.
2) Talk to a Mortgage Lender about which balances would help your credit score by paying them down and which ones are fine to keep in installment payments.
3) After you get approved for a mortgage or even after you get an accepted offer on a home, don’t open new credit accounts! It will decrease your credit score and thus affect your mortgage application.
A preferred Lender that many of our clients work with, Ed Angiollo of Trademark Financial Group recommends:
“Make sure you’re not late on your payments, which seems obvious but many people assume that being late on one month isn’t a big deal and it is. Also, keep your credit card balances below 50% balance to available credit.”
Finally, don’t hold off on buying a home just because you think it requires a significant down payment. The National Association of Realtors found that the average home buyer in the past few years paid a 6% down payment, but there are mortgage programs that require as low as 3.5%, 1% and even 0% down payment.
- How can you find out about these mortgage programs?
- How can you get referred to a Lender to find out what shape your credit is in?
Contact us at firstname.lastname@example.org or 860-539-9076 and we’ll make the appropriate referral based upon your needs!