Mortgage Preparation Tips
Rates May Be Rising:
Mortgage and refinancing preparation made simple
Buying a home is probably the single largest investment
most people make in a lifetime. By preparing yourself
and your credit before a home purchase or refinance,
you can ensure a smooth finance process and can
potentially save thousands on your loan. Improve your
financial profile now so you can take advantage of the
low interest rates before they disappear.
Start by checking your credit:
- To get the best possible mortgage rate, make sure your credit history is healthy and accurate. Aim to raise your credit score above 650 in order to qualify for most prime loans.
- If your credit score is not quite 650, focus your
efforts on paying bills on time, reducing your debt
balances, avoiding new inquiries and clearing negative
inaccuracies from your credit report.
- Make sure the information on your report is correct
and fix any problems you discover. Give yourself 30-90
days for correcting inaccuracies. You can learn more
about the dispute process online in the Credit Learning
Center.
- Found an error while reviewing your credit with the lender? Ask about the "rapid rescoring" process where you can submit a dispute and potentially improve your credit in 72 hours.
Figure out how much you can afford
- The rule of thumb is that most borrowers can afford a
home that runs about two-and-one-half times their
annual salary.
- Calculate your loan-to-value ratio to see how much you
can afford to borrow by dividing the loan amount by the
property's value. If your loan-to-value ratio is above 80
percent your rates may increase significantly. Find a less
expensive home or save up for a down payment to lower
this percentage.
- Calculate your debt-to-income ratio by adding up your
monthly debts and dividing by your monthly income. A
debt-to-income ratio under 20-39 percent is usually
considered good and will help you be perceived as
financially stable.
- Don't be afraid to start small. Just because you may
qualify for a large loan doesn't mean that it is a smart
financial decision to buy as large a home as possible.
Take a careful look at your family budget and your housing
needs before you decide how much you can really afford.
Be a smart borrower this summer and save thousands by preparing your credit before you apply for a loan. Click here
to view your complete credit report plus score in seconds.
Note: The Center For Debt Management suggest you Monitor Your Credit Report regularly. Lexington Law Firm is our preferred choice for fast and effective credit repair. Lexington Law
is reputable and is a member of the BBB. They have a satisfactory record with the bureau.
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The Center For Debt Management™
Helping Consumers Save Money and Reduce Debt Is Our Only Business!™
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Debt Management and Financial Services! The Internet's oldest and most comprehensive debt management
agency! Resources for debt management, consumer credit counseling, debt consolidation, debt reduction settlements, legal aid, financial aid, loans and financing, credit repair, credit reports, insurance quotes, income sources, tax assistance, and more.
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Mortgage Preparation Tips: Credit Score Monitoring, Prime Rate, Refinance
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