Maximize your financing ability
I had a client who happened to accumulate a 800+ credit score but still cannot impress the lenders for a maximum loan amount. Why? Because he has only one credit card and his consumption mostly was charged to his debit card. Here are a few quick tips for home buyers like you:
1. It helps to have more than one credit card so that your total available credit is high relative to what is borrowed.
2. Clean up your credit report - Some studies say that over 50% of credit reports have errors on them. If something is wrong, you can dispute it.
3. Reduce your debt-to-income ratio- Showing a solid debt-to-income ratio will set lender’s minds at ease. Pay off credit cards, make arrangements on student loans. Try to pay off large ticket items.
4. Having a large down payment is a great way to obtain a great rate-Save as much money as you can toward your down payment. You can make a bit of money by putting it away in a CD (certificate of deposit).
5. One of the best ways to get the best price on your home is to have "Proof of Funds". A realtor will likely require a pre-approval letter before showing you a home. You’ll know what you can afford and will be better able to negotiate.
(copyright Bin Ryter)