subject: Picking The Best Time To Apply For A Home Loan [print this page] This might be thought of as a non issue since we mostly feel that the time to apply for a home loan is when you are buying the home. But there are some influences which, if they are under your control, can make one time better than another.
Let's look at the reasons this is so. We have to examine what a credit score is, for the answer. Even those who are not aware of what their score is are aware of how a credit rating will influence the mortgage process. Improving your credit rating can make a big difference in the mortgage you obtain.
Especially if you are looking to buy a house, take some steps to improve your rating and your chances for a home loan.
We have to realize what influences the credit rating. This score is a number that credit agencies apply to borrowers to indicate their credit worthiness. A number of factors are included, including bill payment history, number and scope of credit lines, salary and job stability.
Improving as many of these as you can will help your credit score. Let's talk about the most important factors that you have an influence on.
If you haven't always paid all of your bills in a timely way, now is the time to start. Your poor history in bill paying will still have an influence, but if the immediate past history has improved, that will also be taken into account.
Do not open any new credit accounts when you are getting ready to apply for a mortgage. Lenders even consider unused credit lines that are too large a danger, since you have the easy option 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.
Too many outstanding credit card balances will also have a bad influence your credit worthiness, so now is the time to cut back and stop purchasing and start paying off credit card debt.
If you have any control over the decision, avoid changing jobs at this time. Stability in a position infers to lenders that you will continue to have a salary. A new position could mean that you are in a probationary period, or with a layoff would be the first one to be let go, and therefore not able to keep paying the mortgage.
You may have some influence over when you retire, and this can be a help in your loan application.
Lenders prefer to see a steady paycheck to make the mortgage payment. Apply for your mortgage while you are still working, and then begin the retirement process.
You may not be able to put off decisions or make most of these changes, but each change in your credit life will help your score and therefore your chances for a mortgage.
