For most renters I meet here in Florida, owning a home is a definite goal for the future. However, not everyone has the ability to easily be eligible for their first mortgage. Before you get approved you need to present a sustainable annual income, great credit history, and clean & active payment history. In this article, we will give you easy steps to follow that can help you approved for that first mortgage here in the beautiful state of Florida.
1 - Gather Your Credit Reports (and fix errors)
There are 3 credit bureaus that have the power to release your credit score. Here in the US, these are Experian, TransUnion, and Equifax. Each of them can give a free credit report upon request.
Once you get the report, use that as a document to confirm your credit situation and good payment history when you apply for a house loan. If the information you see on the credit report was incorrect, consult the Federal Trade Commission’s guidelines and report the corresponding agency accordingly.
2 - Don't Apply for Any New Credit Cards
According to credit repair experts, every time you apply for a loan you give authorization to the lender to check your credit history. For other loans like car loans, student loans and mortgages, lenders generally disregard other inquiries in the previous 30 days.
However, if you’ve been applying for multiple credit cards to take advantage of low rates, the Consumer Financial Protection Bureau says this can lower your credit score. To avoid this, the CFPB advises that you refrain from applying for or opening multiple new credit accounts within a short period before applying for a mortgage loan.
3 - Avoid Late Payments for Anything
Paying your bills late looks terrible on a credit report. Make it a habit to always pay on time and if you think you’ll be late in payment, call the company and ask for a payment plan.
4 - Don't Let Your Cards Max Out
There’s nothing wrong with using credit cards as long as you do it carefully. When your credit limit is nearly reached stop spending and let it go down after making series of payments. This will create a huge impact in processing your loan.
5 - Reduce Your Excessive Monthly Payments
Creditors are always on the lookout for excessive monthly payments. This goes to show that you are spending more than usual, so manage your expenses accordingly.
6 - Declare Other Sources of Income
Failure to declare other sources of income besides your regular paycheck could lead to many problems. The bank might view this as suspicious activity which can interfere with expediting your loan appliation.
Inform the bank if you receive any additional income from a divorce settlement, alimony, and other souces of income like stocks and bonds. This way the bank knows all your income is legitimate.
Owning your own property is indeed a dream come true. Make it count by presenting clean financial documents so you can get approved as soon as possible!
And when you’re finally ready to buy that home, don’t forget to give us a call for your homeowners insurance. We can help you get the most affordable coverage to keep your monthly payments as low as possible (with the right protection) Give us a call at (386) 218-4951 or get a quote today.