Getting ready to apply for a mortgage? You know you need to save for a down payment and keep your credit record sparkling. These lesser-known points can also help you improve your chances for mortgage approval.
1. Pay off as much debt as possible. That can be tough as you save for a down payment, but the ability to improve your credit rating by shedding old debt is a major positive for lenders.
2. Don’t close any credit accounts. The ratio of your available credit to credit limit plays a key role in your credit score, so keep those unused cards at least until you close on your new home.
3. Avoid applying for new credit. It’s tempting to start shopping for items you’ll need in your new home. Fight the temptation, since both new credit applications and balances reduce your credit score.
4. Understand the difference between pre-qualified and pre-approved. If you’ve pre-qualified for a mortgage, it means a lender has given your credit history and income a cursory look and estimated how much of a loan you qualify to receive. A pre-approval is very different, as it involves an in-depth look at your finances, credit reports and earning potential. Pre-approval is a more concrete indication that you will get a final mortgage approval.
Loan officer and mortgage professional Andraya Coulter can help you navigate the mortgage approval process and buy a new home. To learn more about her services for the Bay Area and Northern California, contact Andraya.