subject: Your Timing For A Home Loan Is Important [print this page] This might be thought of as a non issue since we mostly feel that the time to apply for a mortgage is when you are buying a house. You may be able to take some critical steps to improve your chance of getting a mortgage, and even improve the rate you get.
There is a good rationale for this. First we need to understand how credit scores work. You may not be at a point to be concerned about your credit rating, but once you start looking for a home loan, you will. Improving your credit rating can make a big difference in the loan you get.
So if you have decided that you want to start thinking about buying a house, now is the time to do something about the credit rating.
We have to realize what influences the credit rating. Basically, it is a numeric way of measuring the risk a lender is taking on a borrower. There are some factors that hold a lot of weight in this rating, such as how the creditor has paid his bills, his credit lines and length of time in his job.
If you can change some of these important issues, you can improve your score. These are some of the items you can try to influence.
If you haven't always paid all of your bills on time, now is the time to begin. You can't adjust history, but if a bank sees that you have changed your ways, your new conduct may help you in obtaining a loan.
The next thing is to make sure you do not increase your credit card debt at all. Lenders even consider inactive credit lines that are too large a danger, because you have the easy choice of overexposing yourself to debt. Even if you are offered great deals such as 0% financing or store discounts with the opening of a store account, resist the temptation because it may harm your credit rating.
High credit card balances will have a big influence on your credit score, so avoid any new purchases, and try to bring down the balances as much as possible.
If you are thinking about changing employers at this time, the simple advice is ""Don't"". Length of time in a job is a major part of your credit rating, since a lender thinks you have a better chance of continuing income. In a new position, you may be the low man on the totem pole and the first one to be let go in a layoff, making it difficult to pay bills.
Retirement is another issue that you may control so that you can get a home loan.
Banks look for current income when they are granting a loan, so having a job at this time is important. Apply for your home loan while you are still working, and then begin the retirement process.
Some of these steps may be simple for you to take, and others may not be at all possible, but any steps you can make will help your credit score and mortgage application.
