As so many prospective home buyers are learning, the market remains favorable for finding that dream home. Inventory is abundant, sellers are willing to negotiate and interest rates are low. Being considered loan worthy, however, is not as easy as it was once upon a time. Besides a stable employment history, lenders are relying a great deal on credit score, and knowing in advance what your three-digit score is, can greatly improve your chances of being approved for a loan.
The first step is to become familiar with how credit scores work and what factors influence your credit score. www.MyFico.com provides this information. Next, visit www.AnnualCreditReport.com and pull a free copy of your credit history as reported by Equifax, Experian and TransUnion. Verify that the information is correct, and contact any companies that have reported false information and ask them to remove it. Also, look for the portion of available credit that you are currently using. Your balances should be less that 50 percent of your credit line. The best scores are obtained by those who use less than 30 percent of the maximum. on time payments and credit use make up 65 percent of your credit score. Make adjustments where needed!
With finances in order, contact a good local lender - get recommendations from trusted sources! He or she will be able to answer your questions regarding the financing process, and will even give you tips to improve that credit score if needed. Once you have a preapproval letter in hand, find a knowledgable realtor to guide you into the home of your dreams!