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In most cases, individuals need to avail themselves of a mortgage, and/or other forms of financing, in order to be able to purchase their home. Since, for most of us, the value of our home represents our greatest, financial asset, it wouldn’t be helpful to move in a more prepared, knowledgeable way to make the process simpler and easier. , and much less stressful? One of the major factors, which influences the process of getting the needed and required funds, is to ensure that you optimize your credit-worthiness to the best of your abilities/capabilities. With this in mind, this article will attempt to outline, examine, review and discuss 5 key areas of thought that can make achieving your goal simple and easy.
1. Credit Card: How you’ve handled your credit cards from a financial responsibility perspective has a huge impact on whether you’ll be able to get the financing you need to buy this property! Lenders, generally, use specific parameters including your net income and debt ratio. They have one, which limits the amount of mortgages they can grant, and, another, which weighs down one’s overall debt. Also, the quality and level of your credit rating, which reflects how you have handled loans in the past, is a relevant factor. It is wise to avoid any new loans during the period of applying for the mortgage and repay your existing liabilities to the best of your ability!
2. Other Loans: Other loans to consider and address include car/automobile, unsecured and other types of loans. When possible, securing a mortgage can be made easier and more feasible by reducing the total amount you owe!
3. Credit Lines: Do you have a line of credit, either with an existing loan you have, or simply, available to draw on? It is wise to reduce as many of these as possible beforehand!
4. Debt Handling: How one has handled previous debts is an important factor when it comes to financing the purchase of a home. Although you can’t change the past, it’s often wise to take some time and consider these things before you move on to find that home of your dreams!
5. Know and Protect Your Credit: Several months before you start your search, get a copy of your credit report. Check this document carefully and completely, and make sure that it does not contain any errors, etc. Also, find out your current credit score, and discuss it with a recommended, professional, mortgage banker or broker, and/or, credit repair specialist, for their recommendations, tips and ideas. Understand, the quality of your credit can, oftentimes, either become your best friend, or, can haunt you for quite some time!
Be prepared, and proceed accordingly! The more you know, and understand, and your willingness to move forward with a high level of personal financial discipline and responsible behavior, the better off you will be!
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