Spiff Up Your Credit

Nothing can shut down a mortgage application quicker than a damaged credit score. Buying a home doesn’t require perfect credit. However, your credit history should demonstrate the ability to pay your bills on time and control your debt.

A score 680 or higher opens the door to a conventional mortgage loan, but if you want the best rates, you need a score 740 or higher. Good credit may seem like a dream, however, simple habits can improve your score.

1. Make timeliness a priority. Mortgage lenders put a lot of emphasis on timely payments. It only takes one or two skipped payments in a 12-month period to miss out on a home loan. Always pay on time.

2. Control your debts. Even with enough income, frivolous spending can stand in the way of your dream home. Debts are the kiss of death when applying for a home loan. What you owe on credit cards, auto loans and student loans increase your debt to income ratio and reduce buying power. Pay off balances to avoid problems when applying for a loan.

Having your home application approved is a wonderful feeling. And once you’ve scheduled a closing date, you’re ready to contact a Kansas City mover to pack your house. This is your biggest investment and buying is an excellent way to jumpstart your net worth.

(Photo attributed to Flickr member @iamrealestatephotographer via the Creative Commons license.)