Planning to buy a home in the near future? The sooner you get your money situation in shape, the easier it’ll be to take on a mortgage loan.
Here’s how you can prepare your credit and finances for a future home purchase.
Pay Your Bills on Time
Focus on building your credit history. The best way to do this is to make sure you pay your bills and rent on time. According to Bankrate:
“‘There is no single element that can so dramatically impact the success of an application as your credit history,” says Brian Israel, vice president of Chicago-based Harris Trust and Savings Bank’s residential mortgage division. ‘Another thing, of course, is savings. People should have a good disciplined savings pattern. That’s the kind of behavior that’s going to make them a successful homeowner.'”
To develop a disciplined savings pattern, check out our post on how to start saving for a home down payment.
Also, make sure you pay your rent on time each month. According to Realtor, mortgage lenders want the last 12 months of cancelled checks if you’re renting from a private landlord. If they see you’ve skipped a month, they’ll consider it a “mortgage late.” Realtor says this can hurt your chances of being approved. Also, make sure your checks are dated consistently around the same time each month. (Read More)
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