Tips for Surviving the Credit Crunch September 8
Here are five expert tips on how to navigate the current credit crisis to ensure success when applying for a mortgage.
- Plan Ahead
Forget the way business was done in the past. Expect to borrow less, pay a larger rate and higher closing costs, and have credit scores scrutinized more closely. Plan ahead and give yourself plenty of time to prepare for passing the loan application process with flying colors. - First Do Research
If you apply for a loan and get turned down it damages your credit score. Instead do your homework, talk to lenders about what they are willing to do for you, and don’t fill out an application until they give you a vote of confidence that your loan – in the amount they recommend – will succeed. - Tune Up Your Credit Score
Get copies of your credit history, challenge any errors and update any old info that is not included. Then take steps to beef-up credit and allow about three months for the new information to be incorporated into your credit history file. Then apply with stronger credit and greater chances of getting approved. - Start Saving
Lenders require larger down payments for home loans, so start saving as much cash as possible. If necessary, sell items like extra cars that you don’t really need. You can always buy them back after the loan goes through, but without adequate cash you’ll never get the mortgage in the first place. - Look for Mortgage Assistance
Many government-backed mortgage programs are available to help Americans including military veterans and low-income families. The FHA lets you borrow with a smaller than normal down payment, for instance, so ask lenders to tell you about all of available mortgage assistance programs in your area.
By planning and taking the steps to improve your chances of getting approved you will avoid wasting time and getting disappointing news from banks. Then you can focus on home shopping with confidence and take advantage of today’s super low real estate prices.