What your credit card does—and doesn’t—do for your mortgage application.
When you apply for a mortgage, your lender is going to look at three things: assets, income, and credit. Let’s take a look at the last one today. What, exactly, does your credit score and your credit card debt mean for your mortgage? Here’s a quick look.
- Your Card’s Balance Matters: When lenders write you the financing you need, they do so because they believe you can responsibly handle the debt. As a result, if your potential lender sees that you have a large credit card balance you’ve been unable to pay off, it’s going to keep you from getting the best rates on your mortgage. It doesn’t have to be a death sentence to your home buying dreams, though. Start being aggressive with your debt now, because the more you can reduce it, the more you improve your future mortgage rates!
- Your Lack Of Balance Matters: With the number of credit card debt horror stories circulating nowadays, it’s not surprising that some people shy away from credit cards altogether. The problem is that without them, it can be difficult to build credit. Having no credit won’t prevent you from getting a mortgage, but expect more paperwork to prove your financial responsibility.
- Your Credit Score Matters: Ultimately, all of this points to one mortgage fact: your credit score plays a big part in the mortgage process. Take the time to get your credit report and start working on your score today if you have plans to buy.
Would you like to learn more about how to balance your existing debt with your dreams of homeownership? A mortgage expert can help you, so contact Andraya Coulter today! Serving the Bay Area and all of Northern California, I can show you how to manage your debt so that you can get the mortgage you need to own a home in California.