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Determine Your Credit Status
Because any lender you apply to for a mortgage will verify your credit history, it’s wise to check your own credit rating in the beginning of your home search, even if you’re sure you have an excellent credit record. There may be blemishes in your credit history that you don’t know about. Identifying and resolving any credit problems to improve your credit rating will provide benefits, such as preferred rates from lenders and home insurers. Acquiring a copy of your credit report is simple. The Fair Credit Reporting Act allows consumers to obtain one free credit report from each of the three major reporting bureaus every 12 months. To obtain a report visit: www.annualcreditreport.com - the only authorized source for consumers to access their annual credit report online for free. Or, call 877-322-8228. The three major credit bureaus:
Equifax - www.equifax.com
Information Service Center:
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111
Experian (formerly TRW) - www.experian.com
National Consumer Assistance Center:
P.O. Box 949
Allen,TX 75013-0949
(888) 397-3742
Trans Union Corporation - www.transunion.com
Customer Disclosure Center:
P.O. Box 390
Springfield, PA 19064-0390
(800) 888-4213
Find Your Credit Scores
Although you may get your credit report free once per calendar year, this free report does not include your individual credit score for that agency. THAT must be paid for. There are several ways to do this. Transunion offers a very good program at +htpp://www.truecredit.com that grants you immediate access to ALL THREE credit agencies’ reports & scores for $14.95 per month with a promise that you can cancel anytime. You can also request your credit report complete with score from each individual agency for about $7.95 each. I have found these two methods the cheapest way to get not only your credit report but your score as well.
Shopping Lenders
Armed with an up-to-date report/score (less than 90 days old & preferably 30 days or less) from each of the three agencies, you need to shop as many lenders as possible. With this information in hand each lender should be more than able to assess your standings without “dinging” your credit score and lowering it (the #1 reason most people DO NOT shop lenders). I have some very good “tried and true” ones that I can recommend. It is in your best interest to try to always stay with local lenders in order to keep hassles & frustrations to a minimum. You want to be able to speak to a person (preferably one who speaks your language of choice) and not get caught up in computer automated assistance which is usually no assistance at all. You also want to make sure that your “chosen lender” will be available when YOU need them and not only when THEY have a problem.
Pre-qualification vs. Pre-approval
Typically you will first pre-qualify for a mortgage, then get pre-approved before you have found the specific home you wish to purchase.
What is the difference?
Pre-qualification: An informal determination by a lender or mortgage broker stating the amount of the mortgage you can afford.
Pre-approval: A guarantee in writing by a lender to grant you a loan up to a specified amount.
T. K. WARD & ASSOCIATES
ON YOUR SIDE! | |
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