California Bad Credit Mortgage Loans 3 Things To Avoid When Applying For Home Loan
California Bad Credit Mortgage Loans - 3 Things to Avoid When Applying For Home Loan
If applying for a mortgage loan with poor credit, there are steps you can take to help get a better rate .
Granted, if your credit score is low, the likelihood of getting a prime rate is slim .
Still, reasonable rate bad credit mortgage loans are available .
As a homebuyer, you must be willing to research various lenders and compare different loan programs .
Moreover, homebuyers should avoid maneuvers which could hurt their chances of approval.
Avoid Late Payments When Applying for a Mortgage
Even if your credit score is good, the occasional late payment is common .
If planning on buying a home, it is important to establish a good payment history with creditors - before applying for a home loan .
Mortgage lenders understand that situations occur which make it difficult to pay bills on time .
However, if hoping to buy a home, it is important to begin creating good credit habits.
Many lenders approve mortgage loans to people with several late payments .
Yet, these persons pay higher rates .
To avoid an increase in mortgage rate, attempt to submit all credit card and loan payments on time .
If possible, adopt new payment habits at least twelve to six months before applying for a home loan.
Limit the Number of Credit Inquiries
A common mistake made by some homebuyers is allowing several mortgage lenders to pull their credit .
Shopping around for a home loan is smart .
However, if comparing three or four individual lenders, do not consent to having your credit checked .
Instead, request no-obligation quotes from lenders.
Quotes do not involve credit checks .
However, buyers must provide an accurate credit description .
To do so, it helps to obtain a copy of your personal report online, which does not count as a credit inquiry .
Once the lenders remit a quote, compare the different offers and choose the loan with the best rates and terms .
Next, complete a mortgage loan application .
To finalize the loan approval, the chosen lender will pull your credit.
Avoid Opening New Credit Accounts
When applying for a mortgage loan, it is important to maintain a low debt to income ratio .
Obtaining new credit lines and applying for a mortgage is a bad idea .
For example, if you buy a car before your mortgage loan is finalized, this will increase your debt to income ratio .
This could affect whether you still qualify for the approved loan amount .
To avoid the hassle of having to re-qualify for a mortgage loan, postpone opening new credit accounts until the loan closes.
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