Debt-n-Loan Consolidation

Mortgage Preparation & Refinance Tips

Use these mortgage preparation and refinance tips to manage your credit score and to improve your creditworthiness!

Rates may be rising:
Buying a home is probably the single largest investment most people make in a lifetime. By preparing yourself and your credit before a home purchase or refinance, you can ensure a smooth finance process and can potentially save thousands on your loan. Improve your financial profile now so you can take advantage of the low interest rates before they disappear.

Start by checking your credit profile:

keeping your credit profile healthy and accurate is the most effective method for getting the lowest mortgage rate.

Work to raise your credit score above 650 in order to qualify for most prime loans.

If your is not quite 650, focus your efforts on paying bills on time, reducing your debt balances, avoiding new inquiries and clearing negative inaccuracies from your credit report.

Make sure the information on your report is correct and fix any problems you discover.

Give yourself 30-90 days for correcting inaccuracies.

You can learn more about the credit repair and dispute process here.

Found an error while reviewing your credit history! with the lender? Ask about the Rapid Rescoring Process where you can submit a dispute and potentially improve your credit in 72 hours.

Figure out how much you can afford

The rule of thumb is that most borrowers can afford a home that runs about two-and-one-half times their annual salary.

Calculate your loan-to-value ratio to see how much you can afford to borrow by dividing the loan amount by the property's value. If your loan-to-value ratio is above 80 percent your rates may increase significantly. Find a less expensive home or save up for a down payment to lower this percentage.

Calculate your debt-to-income ratio by adding up your monthly debts and dividing by your monthly income. A debt-to-income ratio under 20-39 percent is usually considered good and will help you be perceived as financially stable.

Don't be afraid to start small. Just because you may qualify for a large loan doesn't mean that it is a smart financial decision to buy as large a home as possible. Take a careful look at your family budget and your housing needs before you decide how much you can really afford.

Be a smart borrower this summer and save thousands by preparing your credit before you apply for a loan. plus your credit score in seconds.