Tips on Applying for a Home Loan, Part I
Thursday, June 10th, 2010Interest Rates are at the very lowest they have been in decades! These low interest rates will not be around for much longer so we urge you to consider buying right now.
Lots of people ask us what to do when they apply for a loan and what pitfalls to avoid. Here’s the first installment of a list with our pointers.
In an extremely tight lending market, you may think getting a loan will be difficult. You might know that a good credit score is a necessity, but there are things you may have overlooked that will better your chances of getting a loan approved. The following is a list of things you DON’T want to do when applying for a loan:
- Don’t close bank or credit card accounts, especially if they have a high available balance. Paying off the balance and leaving the account open will do more good for your credit score than closing the account.
- Don’t quit using credit cards. Even if you just charge on them occasionally, credit scores will be higher if you use your cards even occasionally.
- Don’t keep a high balance on your credit cards. This becomes a red flag to lenders.
- Don’t say “yes” to every credit card offer. Repeatedly applying for new credit cards can hurt your credit score by decreasing the average age of your credit history and create suspicion as every application requires a credit score inquiry.
- Don’t ignore fines that are owed, even for things like overdue library books or parking tickets. All of these could end up on a credit report.
Watch for Part II coming next week!