Purchasing a new home can be a source of great pride for a buyer. It can be stressful when a person gets turned down for a Mortgage in Portage MI. One of the biggest reasons for a turndown is a poor credit rating. With this information, potential borrowers can prepare their credit so they can be approved for a mortgage.
Helpful Tips For Preparing a Borrower’s Credit
Most everyone knows it takes a good credit score to be able to obtain a mortgage with good terms. Those with lower credit scores will find it difficult to be approved and, if they do get approved, their interest rates will be high, making their monthly payments less affordable. Thankfully, there are some tips that can help individuals improve their scores before they apply for mortgages.
- Before a person even attempts to apply for a mortgage, they need to make sure they thoroughly review their credit report to ensure there are no errors. Errors can be costly and make a person’s credit score drop tremendously. Checking the report will allow a person to contest erroneous entries so they can be corrected.
- To qualify for a mortgage, a person needs to have at least three tradelines in effect in the last one to two years. These can be car loans, student loans, credit cards, or any combination of tradelines. Each of these accounts needs to be in good standing.
- It is important a person does not close out any older credit accounts they have prior to applying for a mortgage since these can help improve their score and make a lender more apt to work with them.
- By the same token, a person should avoid opening new lines of credit prior to applying for a mortgage since these can lower their score.
Be Ready to Apply
It is a wise idea for a person to have enough money in the bank for their home down payment and money to live on for at least six months. Mortgage lenders will carefully check all financial records, and this makes a borrower appear more financially stable.
If you are in need of a Mortgage in Portage MI, contact us right away. Applying is easy and the mortgage expert will help you through each step in the process.