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Home Mortgage Loan - Home Mortgage Loan - Preparing For Your Application In Advance When applying for a mortgage loan your lender could require you to document your qualifying income, assets, including debts before approving your application. Providing your lender with a debt profile including your application could not only boost your qualifying ratios, but could even improve your credit score. Here are several tips to help you prepare for your home mortgage application. You might improve your application not only by checking your credit reports for errors, but by working on your debts. Here are several tips to minimize your disqualifying debts: • Consolidate Your Bills: Having 1 payment for $400 could damage your credit less than having 3 payments of $133. Avoid closing accounts after you consolidate until after applying for a new mortgage loan. • Pay Down Your Credit Cards: If you have installment accounts with regarding a year to go, pay 3 or 4 months ahead. These debts could fall out of your qualifying ratios including off the mortgage company’s radar. • Pay off Your Bills: If you might afford to pay off your bills, obtain rid of as many debts as possible. • Avoid New Purchases: Making purchases with credit prior to applying for a home mortgage loan could damage your credit score including the qualifying ratios your mortgage company uses to evaluate your mortgage application. Hold off on new purchases until after you have the mortgage. These tips are extremely helpful if your qualifying ratios are approaching the point there the lender could disapprove your application, if your credit score is less than 700, or the loan to value ratio of your home is higher than 80%. Having a small debt profile helps makeup for blemishes in your credit reports. You might learn more regarding your mortgage options, including costly mistakes to avoid, by registering for a free six-part mortgage video tutorial.
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