3 Tips To Help You Qualify For A First-Time Home Buyer Mortgage Loan
Have you been dreaming of buying your first home but are worried about whether or not you will be approved for a first-time home buyer mortgage loan? If so, you should know that there are some things you can do to help quickly increase your chances of being approved for the mortgage loan you need. The three tips below can help you to accomplish this very important and rewarding goal.
Tip #1: Boost Your Credit Score By Reporting Your Monthly Expenses
Traditionally, monthly expenses such as rent and utility payments are not reported to credit bureaus. While this can be a good thing for individuals who routinely pay their monthly bills late, this can also be a bad thing for people who routinely pay on time since these on-time payments are not reflected on their credit reports. Thankfully, there is now a way to ensure you are given credit for your fiscal responsibility. Nowadays, you can voluntarily report your monthly expense accounts to the credit bureaus. If you have been making your payments on time and in full, you can expect to see an instant boost to your credit score by choosing to report these accounts. This can help to significantly increase your chances of being approved for your first mortgage loan.
Tip #2: Don't Stash Cash Savings Outside Of The Bank
While it is quite normal for people to stash a bit of extra cash in their homes for a rainy day, this practice could prevent you from getting the mortgage loan you require. This is because lenders routinely check bank account balances when reviewing a first-time home buyer mortgage loan application. The reason for this is to determine whether or not you have the cash reserves required to continue making your mortgage payments even if you find yourself temporarily without any income. If you are hiding away your cash reserves, potential lenders could mistakenly believe that you are financially unstable. That is why it is always best to deposit any savings you have in the bank before submitting your mortgage loan application.
Tip #3: Do Not Open Any New Lines Of Credit In The Months Preceding Your Loan Application
Many first-time home buyers make the mistake of applying for new lines of credit before applying for a mortgage. This can hurt your chances of being approved for a loan even if you do not take on any additional debt. This is because each time you open a new line of credit, the average age of your accounts is shortened. Mortgage lenders often require that you have a longer credit history to ensure you can meet your financial obligations over a longer period of time. This is very important when buying a home since a mortgage loan is a long-term commitment.
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