5 Credit Tips to Get Baltimore Lender Approval
Brenda Fried, AAMS?, CKA?
Financial Advisor serving individual investors and business, with specific focus to serve women.
Congratulations! You and your spouse trembled but decided the time was right to paint homeowner on your CV. If you are like most first-time home buyers, you will need a lender. Lace up your shoes. We have 5 credit tips to get Baltimore lender approval for a traditional loan. A lender will judge you by your FICO credit score. The credit score runs from 300, considered the highest risk of default, to 850, the lowest risk. Though FHA for years has accepted applicants who have FICO scores in the 500s, the practical reality has been that most lenders draw a line in the stone for scores under 620 or even 640.
What are FICO 9 credit scores?
Caroline Mayer, the consumer blogger, says, “(FICO 9 credit score) is an algorithm designed to predict your likelihood of repaying debt. Lenders use your score to determine whether to approve you for loans and credit cards and at what interest rates. Insurers use credit scores to set premium rates, and employers use them when making hiring decisions.
Here in Baltimore and elsewhere, many scattered pieces of data in your credit report make up your credit score. The percentages in the chart (above) reflect the importance of the five categories in determining how the calculations affect your FICO 9 Credit Score.
5 Credit Tips to Get Baltimore Lender Approval for a Traditional Loan
1. Know your FICO 9 Credit Score. You can request a free copy of your credit report, then check it for errors, such as late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts are correct. If you find errors on any of your reports, dispute them with the credit bureau.
2. Save your cash. Requirements for getting a mortgage loan often change, and if you are considering applying for a home loan shortly, be ready to cough up the cash. Walking into a lender’s office with zero cash is a quick way to get your home loan application rejected. Mortgage lenders are cautious: Whereas they once approved zero-down mortgage loans, they now require a down payment.
3. Get out of debt and don’t buy any big items like a car before applying for a loan. Your debts determine if you can get a mortgage, as well as how much you can acquire from a lender. Lenders evaluate your debt-to-income ratio before approving the mortgage. If you have a high debt ratio because you’re carrying a lot of credit card debt, the lender can turn down your request or offer a lower mortgage.
More of the 5 Credit Tips to Get Baltimore Lender Approval
4. Stay in your job, at least until you close. Lenders get spooked at uncertainty.
5. Get pre-approved for a mortgage loan before looking at houses. Pre-approval shows emotional and financial responsibility. On the one hand, you know what you can spend before bidding on properties. And on the other hand, you avoid falling in love with a house that you can’t afford.
Harbor Bay Properties, LLC is part of the community.
Brenda Fried, the founder of Harbor Bay Properties, LLC, grew up in Baltimore City and County. Her company is here to help homeowners out of any distressed situation. As residential real estate redevelopers, we are in business to make a modest profit on any deal; however, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Just the simple truth about your home and how we can help you sell it fast to resolve any situation.
HELPING REBUILD TOMORROW’S NEIGHBORHOODS BETTER TODAY