Buying your first home is such an exciting experience! So I was pleased to work with a client recently who wanted to buy her first home but she knew that there was some work to do before she could qualify for a mortgage.
She was working at a good job -- a job that she had held for the past for four years -- and she was earning a good income (thanks to the annual raises she received from positive yearly reviews). But she knew that not everything was perfect: She had slacked on paying some credit card payments on time, and she didn't have a clue about credit reporting. Even with great income and job stability, her ability to qualify for a mortgage was at risk.
We worked together and I helped her understand the importance of credit reporting and we cleaned up her credit that had some mistakes and then she focused on lowering her debt and paying all accounts on time. I'm happy to report that she just bought her first home!
If you are thinking about buying your first home, your credit rating will play a critical role in helping a mortgage lender determine whether or not to lend to you. Here are five credit tips you can use to help you stack the odds in your favor:
These steps won't immediately result in perfect credit. It can take to time build up great credit scores. But they can improve your chances of going to a bank to get a mortgage... and getting a mortgage at a more attractive rate. As I like to say," Time heals all wounds, just like on the credit report."
And here's one other bonus, provided by Connecticut-based Mortgage Broker Denise Panza: "Instead of going to a bank for a mortgage, talk to your friendly neighborhood mortgage broker. Instead of putting all your eggs in one basket dealing with a bank, mortgage brokers can draw from a wider collection of lending institutions to help you find a great mortgage at a great rate to fit each individuals needs."
If you're an aspiring first-time homebuyer, start working on improving your credit rating right now so that when it's time for you to find a home, you'll have no trouble finding a mortgage.
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