How Mortgage Lenders Use Credit Scoring On Mortgage Applications
Before you apply for mortgage know that your credit scoring matters a lot if you want to get the application accepted. Right now the one thing that plays a big role in your mortgage application
Before you apply for mortgage know that your credit scoring matters a lot if you want to get the application accepted. Right now the one thing that plays a big role in your mortgage application acceptance is that you clear all of your previous credit reports and work on increasing the credit score as much as you can. It’s very simple and we all know the fact that having a bad credit mortgage is something to be worried about and you will have to figure out a way to clear up the record. On the other hand if you are someone who has a good credit scoring then you need to focus on maintaining it in order to lock a low-interest rate.
Today in this article we are going to jot down a few tips on how can you improve your credit on a mortgage application. So, folks take notes of what we are about to tell you because this article can actually be very beneficial for you in the long run.
Go Through Your Credit Reports :
Always remember that your mortgage lender always looks for three main things when you apply for a mortgage.
- A steady income
- A down payment
- Your credit history
Now you never know which one thing is pulling down your credit history and you have to make sure that all of it is clear or else this can become a big hurdle in getting your mortgage application accepted because one wrong move in the credit history can lead you to mortgage rejection.
Pay off All Your Previous Accounts :
You see the one main thing that the mortgage lenders look for is that are you able to pay them back on time or not and this can be clearly checked by your pending, late account, charge-offs and bills in collection. So, make sure that all of it is cleared before you apply for mortgage because the more pending these bills are the more are the chances that your application will get rejected.
Reduce Your Debt To Income Ratio :
If you have more debts and the ratio of your debts is higher than what you earn then this can be a big problem for your mortgage application. The one thing that lenders look for is that are you even able to pay the mortgage back on time and it is but very obvious that if you have a list of debts to be paid off then how can you give the mortgage payment back on time. So, do keep this factor in mind and make sure that the ratio of your debt is almost only 12% of your income. If you aren’t in debt then that is a good thing but if you then make sure that you keep the figures low.
Pay Your Delinquencies Back On Time :
Always pay your delinquencies back on time and make sure that you don’t have even a single one unpaid. Also, if you recently paid off your delinquencies then wait for almost 6 months to apply for mortgage because the older the delinquency is the better it will be for your mortgage application.
These are a few tips that can help you get your mortgage application accepted. Just follow the above-mentioned tips and we assure you that you will have positive results.
Read More :