If you’re thinking about buying your first home, getting pre-approved for a mortgage is the first step. During the pre-approval process, your mortgage lender accesses details about your income, debt, assets, and credit score. Before applying for a mortgage, there are a few factors you should keep in mind:
Check your credit reports
Your credit score determines whether or not you’ll be approved for a mortgage, as well as the interest rate you receive. People with a credit score in the high 700s qualify for the best interest rates, while lower scores earn higher interest. If you’re worried about your current score, focus on paying off your current debts and submitting payments on time.
If you’re waiting for approval on a home loan, put a freeze on all other purchases for the time being. Any major investments can negatively impact your credit score. Applying for a new credit card or car loan is particularly risky, as both have a 45-day window for rate shopping.
Be sure to meet with at least three different mortgage lenders so you have options to choose from. If you receive several approval letters, you may be able to negotiate better terms by showing results from other lenders. Plus — if you shop around during the 45-day window with multiple lenders, credit bureaus will only count this as a single pull on your credit.
Good luck with the home buying process! If you have any questions or concerns along the way, we’re here to help. Call or reach out online anytime. We look forward to serving you.