How To Assess Your Credit And Finaces When Purchasing A Home

By
Real Estate Agent with William Raveis Legends Realty Group 30PA1082583

This Is a crucial first step when considering to purchase a home.  Simply put you wouldn't go shopping without your wallet, nonetheless take a guess at what a bank is going to lend you.  The criteria for lending changes daily and only a qualified mortgage professional can give you the guidance and direction you will need.

Even though a lender is going to check your credit you may want to do so before calling so you are aware of what is on the report.  There may be blemishes in your credit history that you don't know about.  If you catch them soon enough and work to remediate them you won't have that road block when ready to purchase your home.  I have met customers that felt they would get pre-approved once they found a home and had a price range estimated in their mind. Soon after they found a home, fell in love, contacted the bank only to find out they weren't qualified because the taxes were out of their range and they didn't make enough to afford the home in general.  I'm writing this post so that you can avoid that unnecessary stress and make an educated decision.

The Fair Credit Reporting Act allows consumers one free credit report from one of the three major reporting bureaus every 12 months.  You can visit www.annualcreditreport.com or call 1.877.322.8228.

The three bureaus are:

1) Equifax - www.equifax.com - 1.800.685.1111

2) Experian (formerly TRW) -
www.Experian.com - 1.888.397.3742

3) Trans Union Corporation -
www.transunion.com - 1.800.888.4213

Once you have your report you can have a mortgage professional help you figure out where you stand.  If all is clear then the next step is getting pre-approved for your mortgage.  Avoid the pre-qualification, this and $2 will get you a ride on the bus.  Any offers made on a property will need a pre-approval letter to accompany.  Here's the difference:

1) Pre-Qualification - an INFORMAL determination by a lender or mortgage broker stating the amount of the mortgage you can afford. 

2) Pre-Approval - A GUARANTEE in writing by a lender to grant you a loan up to a specified amount.  Here your credit has been checked, assets verified, and an underwriter has signed off.

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Christopher Pagli

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