23 Jan Finding a Better Mortgage – Tips for Success
Banking woes have brought the mortgage industry back down to Earth, but the new rules and requirements don’t mean that you can’t get a loan. With a little work ahead of time, you can increase your own chance of qualifying for the best loan when you’re ready to buy.
- Ensure your credit report is 100% accurate. Review each line item on your credit report to be sure that everything on there belongs to you. (Mistakes happen, especially if you have a common name.) Ensure that your payment record is accurately reflected. If you find any discrepancies, contact individual creditors to request corrections. Once the creditor has corrected any error(s), re-check your credit report to determine if your record has been updated accurately.
- Credit maintenance. Cleaning up your credit BEFORE applying will help ensure the lowest rates. By making timely payments, paying off any collections, and paying down credit card balances, you increase your credit score. It also shows potential creditors that you’re being responsible with your obligations and keeping debt levels low.
- Being upfront. If you’ve had credit issues in the past, trying to cover them up will only hurt you. Be straight forward on your source(s) of income, and don’t try to hide assets. Omissions like these can only delay your application, and may jeopardize your chances of securing credit at all.
- Documentation accuracy. Review your paystubs, investment and bank statements to ensure information on them are accurate. If the amounts, names, and addresses, are incorrect, submit corrections ahead of time. If you’re putting a down payment on the property, be prepared to provide documentation on the source of the funds.
- Review your Good Faith estimates. Know all the fine print of the loan(s). While paying the lowest APR is what we all aspire for, focusing solely on the APR can mask other negative terms buried in the fine print (e.g. origination fees and/prepayment penalties).
Before you go to the bank seeking a loan, a little attention to your finances can go a long way. While some of these steps may be time-consuming, they can help you get the best deal possible.