Mortgage Tip # 1 Check Your Own Credit
It is important not to let any third party check your credit before you are ready to borrow or buy. Every time there is a credit check done that check is recorded and tends to lower your score.
So How Do I Check My Own Credit ?
So What Am I Looking For ?
You are looking to see what your score is and to see if there are any issues such as late payments or poor credit reports. To qualify for a mortgage with a reasonable interest rate at an A lender you should have a score over 650 and no bad credit history.
So What Can I Do If My Score is Low or There Are Issues?
There are things you can do to improve your score. First bring all payments up to date. Second call any lenders with bad loans showing as not paid and try and make a proposal to pay them off (They may settle for less) or set up a re payment plan. Third if any of your credit cards are over 65% of their limit pay them down under 65%. Some times you can shuffle some balances between cards to accomplish that.It may take a few months but eventually your score will improve and you can track it until it does.
Do I Have Other Options If My Score or Report is Bad ?
Depending on how bad the report is a mortgage broker may have a B lender or if you have a lot of equity in your home the broker may find an equity lender but your interest rate would be higher. If cashflow is reduced by job loss, illness etc you could talk to a bankruptcy trustee regarding a consumer proposal or bankruptcy. Once you have a bad credit report bad reports stay on your credit for up to 7 years. Many times a bankruptcy makes more sense because you can be discharged in 9 to 22 months and often can keep your house . Life throws us all knuckle balls and quite often bankruptcy is the best option for you and your family. Struggling for 7 years may not make sense if reduced cashflow is impacting your family's quality of life. Most trustees offer a free consultation so it costs nothing to explore that option.
In closing I hope you have found this article helpfull and please feel free to contact me with any questions.