The first thing you need to do before you think about shopping for mortgage lenders is make sure your credit is in order. Credit reporting agencies make frequent mistakes and you do not want mistakes on your credit reports. There are three credit reporting agencies in the United States. The agencies are Trans Union, Equifax, and Experian. You need credit reports from each agency; dont let someone try and sell you your credit report. Its your credit report, why should you have to pay for it? Recent legislation in the United States requires each of these reporting agencies to provide you with one free copy of your credit report every year. To get your credit reports for free visit AnnualCreditReport.com. Once you have your credit reports review them carefully for errors. If you find errors you will need to dispute them with the individual reporting agencies. Each agency has a procedure for disputing errors which you can find on their websites. The next step is to lower your debt-to-income ratio. This ratio is simply the sum of all your debts versus your annual income. Lenders use this ratio to help determine how much of a risk you are for lending money. The debt-to-income ratio is also an important part of your FICO score. By paying down the balances on your credit cards and closing the accounts of cards you dont need or use, you will improve your debt-to-income ratio and your FICO score. When shopping for a mortgage loan you need to be mindful of who is accessing your credit record. Do not make any major purchases while you are applying for a mortgage. Anytime a lender, be it for a car, a new television, or a dryer, access your credit report, an inquiry is recorded on your credit history. Too many credit inquiries in a short period of time can damage your FICO score. When you screen lenders and their offers ask for no-obligation quotes. You will need to provide the lender with an overview of your credit to get the quote; however, there will be no credit inquiry made. Make sure you are giving the lender an accurate picture of your credit and income. If you over-estimate your income or credit information the lender may change your mortgage after getting the correct information. You could even be disqualified. Finding the best deal for your mortgage involves doing your homework and shopping for the best mortgage lender. To learn common mortgage mistakes to avoid sign up for a free mortgage guidebook. |
