4 Tips to Prepare Your Credit for Buying a Home

Are you in the market for a new home? Congratulations! Now comes the challenging part: preparing your credit. Even if you think you have a stellar credit rating, you need to check on your credit report to make sure everything is in line. Knowing what your credit score is and making sure it’s accurate are both two key components of the process. Do your research on your credit history, do what you can to improve it, and then consult with Arizona mortgage brokers for help. Here are four tips to help you in preparing your credit when looking to buy a house:

  1. Obtain a copy of your credit report.

You should do this at least three months before you even start the house hunting process, advises CNN Money. Look it over in depth and make sure all the information — down to your name and address — are correct. Make sure the credit cards you have match up with what’s on the report. If there are any cards that are still open that you are sure you’ll never use again (such as high-interest store cards), be sure to close them by contacting the credit card company in writing. Fix any other problems you find before you begin the mortgage process to avoid delays.

  1. Refrain from using your credit card for awhile.

You may be excited about buying a home and everything that goes into it, but resist the urge to go on a shopping spree for new furnishings, decor or appliances before you close on a house. If you can, don’t put anything large on credit while you’re in the process of buying your house. If your debt ratio goes too high, the bank reserves the right to disqualify your loan. Nix the thought of a car loan while you’re at it, for the same reasons.

  1. Limit your paper trail.

When in the process of filling out a mortgage application, you will likely be asked to provide many months of statements, from checking accounts to savings accounts. Avoiding making large transfers right around this time, as you’re creating a longer-than-necessary paper trail that will make it more of a hassle to organize your accounts.

  1. Keep three trade lines open.

A trade line is anything that you put on credit, for example; this would include anything from credit cards to students loans to auto loans. Most lenders like to see at least three open, healthy trade lines that you’ve been active on for a year or two. Start building up those lines of credit and paying them off on time six months before applying for an Arizona mortgage loan.

If you follow these tips, you will be on your way to hassle-free homeownership! Whether you are a first-time buyer or an avid investor, let the mortgage brokers of Marquee Mortgage help you to learn about your financing options. With years of experience in the mortgage industry, the team at Marquee Mortgage is some of the best mortgage lenders in AZ. Let us help you finance the home of your dreams, call today and schedule your free consultation.