Before talking to a Realtor and start looking for homes whether online or by driving by open houses, there are three very important things that anyone should do beforehand.
Check credit scores and report for errors
The first is checking their credit score to see if there are any potential problems before applying for a mortgage. If there are, it could stop them from getting the loan even though they have the income that would qualify them.
Credit scores range between 300-850 with higher being better. The good news is that credit scores are easy to check and it’s much better to find out if there is a potential problem before applying for a mortgage.
The three major credit reporting agencies in the United States are Experian, TransUnion and Equifax. Homebuyers should visit them all and look at their reports to see if everything is accurate or if there are any issues.
When doing this, they should also check and make sure that if their scores differ between agencies, then they should see which one is the closest to what it really is.
“It’s very important for people to look at them because it will tell you where you stand,” says Joe Parsons, who works with Fair Isaac Corporation, the company that created FICO scores. That way, any issues would have to be handled before they even started looking for homes.
This is also important because even if their scores are low or borderline, it doesn’t mean that they can’t get a mortgage loan; they just might need to provide more documentation in order to do so.
You can check out your credit report once a year at www.freecreditreport.com. Even though this website won’t show you your credit scores, it will show you your full credit report with all the tradelines.
Get a preapproval form a mortgage professional
Once you know about your credit you should contact a mortgage professional and work on a pre-approval.
The process for this is fairly straightforward. You can make an appointment with a mortgage lender who will help you through the process and that way, figure out if you qualify for a mortgage, what kind of interest rate they’ll be charged and the type of loan that will best fit your financial situation.
This is one of the most important steps in buying a home because it tell you what you can afford, whether you should consider another type of financing and it also gives you an advantage against other people who are looking for homes.
But don’t just pick any mortgage professional as they are not all created equal. Do your research so that you can feel confident that the person you pick is knowledgeable and will take care of you as if they were buying their own home.
Inform your employer that you are buying a home so
This is not because you want to flaunt to your co-workers that you are buying a home! This is because employers play a vital part in your ability to getting a mortgage as the lender will do a verification of employment. This is the process when a lender submits certain forms or reaches out to your HR department or a supervisor who can verify that you in fact, are an employee of the company. When an employer delays or does not respond to a lender, it can delay your closing.
Looking to start the home preapproval process?
At Andes Mortgage LLC., we make it easy to get your loan process started. Whether you are looking to purchase or refinance a home, our knowledgeable team will be able to guide you through the tricky waters of mortgage financing. Get started today by clicking this link and set up an appointment with us!
