Mark Roemer Oakland Explains What Credit Mistakes You Should Avoid Making When Buying a Home
According to Mark Roemer Oakland, first-time home buyers often make many credit mistakes that affect them negatively in the future. Fortunately, you can avoid such mistakes and maintain a healthy credit score with some knowledge and by following the correct steps.
Here are a few credit card mistakes you should avoid when buying a home:
- Not using a credit monitoring service – You must strive to keep your credit score as high as possible in order to get easy approval for mortgage loans and enjoy better interest rates. However, if you have a history of significant debt, late payments, delinquent accounts, it is essential to fix those credit issues as much as possible.
Thus, you must subscribe to a credit monitoring service such as Transunion, Experian, or Equifax so that you can check your credit score and also look for errors and fix them with supporting documentation before applying for a mortgage loan.
- Not applying for a mortgage with multiple lenders – When you apply for a mortgage with several lenders, it allows you to compare the different loan rates, lender fees, and closing costs. Typically, you should have about 3 to 5 loan estimates so that you can get a more accurate sense of how much you can afford, and which lender would be the best choice for your needs.
Traditionally, lenders that promote no or low closing costs charge a higher interest rate and lenders that offer discount points to reduce your interest rate charge a higher closing cost. Thus, you must pay close attention to the closing cost and the fees section since choosing correctly can allow you to rack up significant savings.
- Not getting pre-approved – Homeowners with a pre-approval letter tend to be taken more seriously by the seller and can often enjoy an upper hand during the negotiation process. This is because lenders inspect every applicant thoroughly and consider several factors to ensure the applicant has a good credit history and score, adequate financial assets, stable income and employment history, and more before generating a pre-approval letter.
On the other hand, sellers in a competitive market won’t take you seriously if you don’t have a pre-approval letter.
- Overborrowing to purchase an expensive property – Typically, it is recommended that you borrow a loan amount of between 2 and 2.5 times your annual income to ensure you can afford your new house without any issues.
It is never advisable to purchase a house that you cannot afford even if your lenders qualify you for it. In fact, you should never max out your credit limit to maintain a good credit score and ensure you can repay the amount with interest comfortably.
Mark Roemer Oakland suggests you hire the services of a professional Premier Sotheby’s International Realty Palm Coast, FL agent in order to narrow down your choices and save your precious time. Real estate agents can suggest suitable properties for you after listening to your requirements, help in negotiation, and spot issues that you might not be able to notice.