If you are one of those people anxious to buy your first home, you’ll want to apply for a mortgage. This is where most of my prospective home buyers get their first dose of reality. In Long Beach, unlike many ares in the United States, the average cost of a home is quite a bit higher than the national average (in Long Beach, the median price of a home is $475,000). Therefore, a mortgage is tends to be higher. There are plenty that have trouble getting approved for the level of mortgage needed. If you are one of those people, you’re not alone. Many have challenges based on their income and more importantly, on their past credit reports or a personal financial challenges.
Having sold many homes in and around Long Beach, I’ve come to realize there a number of quick credit tips that will help you get the “Green Light” for your loan approval.
Make Sure Your Bills Are Paid On Time
It seems pretty easy, but in today’s increasingly complex world of utilities, credit cards, subscriptions and other services, making sure all your bills are paid on time has beem increasingly more difficult. Juggling will inevitably get you in trouble. And, more importantly, every overdue bill can leave a negative mark on your credit. The key is to simply, organize and make sure you are able to cover all your bills prior to the due date – ideally for 1 year.
Totally Pay Off Your Credit Cards And Lines Of Credit
The best and easiest way to improve your credit is to make sure your credit cards and any other obligations are paid in full. This not only proves you are responsible but also eliminates accrued interest (which can be substantial) from your life. If you have outstanding debt whether it is credit cards, student loan, department store cards or other debts, get them paid off as quickly as possible.
Don’t Make Any Big Purchases or Loans
One sure way to inhibit your ability to get the highest possible mortgage is to make large purchases like a car, appliances, other “large ticket” items or new loans. So I always recommend refraining from making these types of purchases a few months prior to applying for a mortgage and during the home purchasing process. After your home closes is the time to re-assess your “big ticket” purchasing power.
Look for Errors in Your Credit Report
In California, like many other areas in the United States, three credit reporting companies dominate the credit landscape – Equifax, TransUnion, Experian. If you haven’t taken the time to look at your credit rating in the past 6 months, take the time to do it.
Surprisingly, you may discover that there are inaccuracies and/or errors. Many of these, in my experience, are reported in error and can easily be cleared with a few phone calls. However, other may additional effort or coordination with a credit repair specialist. Every credit report error that you can fix will bring you one step closer to your mortgage approval. Knowing your credit and what may inhibit your ability to get a mortgage, is the first step toward achieving your goal of home ownership.
Do not hesitate to reach out to your local mortgage broker/lender to get additional insight and advice on how to proceed in getting loan preapproval/approval. They have the latest tips and strategies available to get you into your new home. If you’d like the names of a couple reputable lenders, give me a call at (562)618-9770.