It is critical to be aware of your credit status, prior to buying a home. Most lenders will pull your credit scores from the 3 major credit bureaus, in considering you for a mortgage loan. It is quite likely that you will have a different score from each bureau. Commonly, lenders will drop your highest and lowest score, and consider only the middle score. If you have any outstanding late payments, collections, etc. PAY THEM OFF. After viewing your reports from each of the 3 bureaus, call and dispute any inaccurate information that may be pulling your score down. Any information on your credit report that can be proven to be inaccurate must usually either be replaced with accurate information or removed from your credit report.
It is also important to remember that there are many wonderful new loan programs designed for first time buyers, buyers with poor credit, and buyer’s who will complete a purchase with no money down.
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Get Pre-Approved For a Mortgage Loan
A buyer who is pre-approved for a mortgage loan, when making an offer on a property often has a great advantage over a competing buyer who is not pre-approved for a loan. A pre-approval letter from your lender tells the seller you are a ready, willing, and able buyer. However, an offer that is conditional on obtaining financing can sometimes be a deal killer.
Do Not Make Any Additional Major Purchases
Do not buy a car, new furniture, or open new credit lines when you are planning to buy a home. Incurring large amounts of new debt may decrease your credit score and/or the amount of loan that you are qualified for. Additionally, too many inquiries on your credit report over an extended period of time may also decrease your credit score.
Make Sure You Have Enough Money For Closing Costs
Be aware that in addition to a down payment there may be several additional expenses that you have to pay at closing, including lending fees, title insurance, attorney and home inspection fees, etc. However, it is also important to note that you may be able to negotiate with a Seller to pay some or all of these fees for you.
Insist On A Home Inspection
Never, ever buy a house without first getting it inspected. 5 days after moving in and finding your kitchen floors covered in water due to leak behind the wall, is far too late to find out there was a leakage problem. Be sure to always make your offer for a new home conditioned upon obtaining a full home inspection, by a qualified inspector.