Are you getting a mortgage loan? Getting a mortgage loan doesn’t have to be nerve-wracking if you know how to go about it. Here are the things you need to consider before you take the leap of faith and buy the first home that catches your eye.
Check your credit reports and improve your credit score. Getting a mortgage loan will be easier if you know the current situation of your financial health. If you have not been checking your credit reports, now would be the best time. There are instances that you can see entries that shouldn’t be there – debts that have long been repaid and not updated balance and loan status are just a few of the possible entries that can cause damage to your credit report.
If you see entries that shouldn’t be there, you can dispute them at the credit bureau, and you can expect them to respond to your dispute 30 days after they receive your complaint. Even before you check your credit score and history, the best thing to improve your credit score. The goal is to get a 620 credit score if you apply for a conventional loan. If you are going for government-backed loans, you will need a minimum of 500. A conventional mortgage or government-backed, the key is the higher the score, the better.
One of the easiest ways to improve your credit score is to pay your debts on time and in full. Make sure that you keep your debt-to-equity ratio as low as possible. Another good tip to consider is to avoid purchasing big-ticket items a few months before getting a mortgage loan.
Work on your paperwork. Getting all your financial documents together is essential when it comes to getting a mortgage loan. Start gathering your tax returns for the last two years, proof of assets, list of liabilities, and other financial documents you have that can help you get a mortgage loan. Contact us now so we can help you with the process.