Preparation Tips for Clearing Credit Issues and Choosing a Lender

Talk to loved ones, get advice from someone you can trust, or just study the tips listed below because it never hurts to read too much information on the subject that will require repayment and be with you for a larger part of your life. The moral of the story is to take the time that you require, do the as much research as possible, and operate at your pace and on your terms and not your real-estate agents or lenders.

  • Do you have errors or fraudulent claims on your credit, which are preventing your from qualifying for a mortgage? Look into rapid rescore services, which may help those applying for mortgages to dispute and correct these errors more quickly.
  • Your mortgage documents may include a tie-in clause which dictates who you must use for insurance or appraisal. This may mean that you will pay more than you would if you were to find providers on your own. You should attempt to negotiate this clause with your lender to ensure that you get the best deal possible.
  • You may find it difficult to compare mortgage rates when they seem to be changing on a daily basis. Try to apply for mortgage loans on Fridays, as these rates should remain the same until Monday. This will give you time to compare offers over the weekend.
  • Have small debts, such as low balances on your credit card? While these debts may seem unimportant and may do little to affect your monthly expenses, your lender may frown upon multiple debts. Before applying for a mortgage, try to eliminate these small debts.
  • Think that you cannot afford a mortgage with a shortened term? While 30-year mortgages offer lower monthly payments, you will never know how unaffordable it is unless you ask for a quote. A shortened loan term could save you tens of thousands of dollars in the end, so it never hurts to ask.
  • Are you a former or active service member of the U.S. Military? You may qualify for home buying and mortgage assistance from the U.S. Department of Veterans Affairs. VA loans are available to those who qualify, offering them little to no down payments and extremely low interest rates.
  • Are you close to defaulting on your mortgage? Before you miss a payment, call you lender to explain your situation. They may provide you a grace period or give you more time to make the payment without penalty.
  • Do you need a cosigner in order to qualify for a home loan? It is important to remember that if you fail to make payments on the mortgage, the cosigner’s credit is a risk, and they might be held responsible for the debt. Make sure that both you and your cosigner understand the legal and financial obligations before committing.
  • Ensuring that you do business with a reputable lender is essential. Aren’t sure whom to trust? Visit the website for your local Better Business Bureau to see if they have approval, or have any complaints filed against them. This will prevent you from getting involved with a company that cannot fulfill your home loan, or whose business practices will result in its closure.
  • If you have applied for and been approved for preapproval on a mortgage, it is important to remember that this offer has an expiration date. They are typically good for 30-90 days. If you have yet to find a property you are interested in buying, be sure to contact your lender to find out about getting an extension on the preapproval offer.
  • Are you self-employed? It is important that you have records of your income when you apply for a mortgage, as you most likely will not have typical paychecks. Along with your tax information, your lender may ask to see your bank statements and even receipts.
  • The self-employed may have trouble finding lenders willing to work with them. If you own your own business, you may want to consider using a mortgage broker. These brokers have more knowledge and resources to help you find such lenders, with ease and convenience.
  • Are you self-employed and your spouse employed full time or vice-versa? You may find it more beneficial to have the self-employed to be the secondary applicant. Lenders may be more willing to borrow to someone with a steady paycheck.

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