Five things lenders want to know about your credit is a post from Motley Fool, and it has very good information for homebuyers.
I’ve adjusted them a little to put my take on them.
1) Tell your lender everything about your finances. Yes. Everything. Your credit report will show it all, or something may show up later, so head it off at the pass. Plus, why spend so much money on application, appraisal, inspections and the like if something is going to potentially stop you from getting your mortgage?
2) Big past credit issues. Make sure you have explanations in writing, or releases of past issues. If you’ve had ANY credit issues or problems, please tell your lender up front!
3) Extenuating Circumstances. Let’s say you had a short sale or foreclosure in your past, are beyond the written deadlines, and have made payments on all since then. Was this issue due to a job loss? Move? Divorce? Your lender will need as much documentation as possible.
4) Collections. Ask your lender how to handle any situation that involves a collection. Should it be paid off? HAS it been paid off & should be corrected on the report?
5) Resolve Any Disputes. Even if technically it “helps” your credit score, it is very likely an underwriter is going to need to get those disputes removed from your credit report. Ask your lender UP FRONT what to do.
Here is the article on Motley Fool.
Essentially, to make the home buying process a smoother one, BEFORE YOU LOOK AT HOUSES, GET PREAPPROVED FOR A LOAN. If you don’t have a loan officer you know and trust already, ask your real estate agent for a recommendation.
The preapproval process will open up some questions that you may not even know about — and can save you a lot of time, energy, MONEY, and headaches up front.
If you’d like a recommendation for a Baltimore lender, please let me know. I work with a few who are wonderful about assisting buyers!
Image courtesy of Stuart Miles / FreeDigitalPhotos.net