How To Handle Your Credit While Buying A House

If you want to buy a house and will need a loan to do so, you will need to be very cautious with the way you use and handle your credit during the home-buying process. If you fail to handle this properly, you could jeopardize your ability to get a loan, and this could prevent you from buying a house at this time. Here are several important things to understand about your credit before looking at homes for sale.

You should initially get preapproved for a mortgage

The first thing you should understand is that you should not start shopping for a house to buy until you get preapproved for a mortgage. If you shop before this, you might feel very discouraged if you find a house you really like but find out you cannot currently qualify for a loan. Getting preapproved is also important as it will help you know what price range to stick with as you shop for a home to purchase.

The preapproval is based on your current credit

When you get preapproved, it's important to understand that the lender based the preapproval on your current financial state. This includes your current job and income, your current debt, and your current credit score. As long as all these things remain about the same when you find a house and put an offer on it, you should have no problem getting approved for the loan.

Changes in your credit could disqualify you from getting approved

If, on the other hand, things on your credit report change drastically, you might end up unable to get a mortgage loan. Here are some of the top things you should avoid doing if you want to stay eligible for the loan you are preapproved for:

  • Racking up your credit card balances: If your credit card balances increase, it could cause your credit score to decrease. Increased balances can also cause your debt-to-income ratios to change, and this could cause problems qualifying for a loan.
  • Applying for new lines of credit: Each time you apply for new credit lines, the lenders will check your credit report, and this will be listed as inquiries on your report. Inquiries to your credit report cause decreases in credit scores.
  • Buying new assets: Additionally, you should not buy anything major during this time, such as a car or motorcycle. This will also change your debt-to-income ratio, and could cause problems getting a loan.
  • Failing to pay bills: If anything negative gets posted to your credit report during this time, it could lower your score enough that you no longer qualify for a loan.

Buying a house is no easy task, and it requires a lot of planning and careful financial management. If you are currently preapproved for a loan, contact a real estate agent to help you find a house to buy. 



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Listing Your Home For Sale Are you thinking about listing your home for sale? Although it might not seem like a pressing priority, being able to list your home when you want to can really help you to stay financially liquid in a slow market. However, you have to know the tricks of the trade if you want to prevent problems in the long run. I began carefully thinking about different ways to improve my sales tactics, and it was really cool to see how many of the ideas we had helped. This blog is all about listing your home for sale and preventing issues in the long run.

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