NEW YORK (MoneyTalksNews) —According to USA Today, in January, home sales jumped 16% over December’s totals. That means more people are buying and the end of the housing slump might be in sight. It also means mortgages are back.
In the video below, Money Talks News founder Stacy Johnson has four dumb moves you should avoid if you’re planning on applying for a mortgage any time soon. Check it out and then read on for five other mortgage mistakes.
Now, let’s hash out the details on Stacy’s dumb mortgage moves and add a few more…
1. Not checking your credit
The first thing lenders will do is check your credit, so it’s dumb not to know what’s in there before they look at it. Order your credit reports six months to a year before you apply for a mortgage, getting free copies through AnnualCreditReport.com.
Once you’ve got your credit in hand, make it shine. Dispute any errors with the credit reporting agencies. Settle accounts and, if possible, negotiate removal of negative remarks when you do. Pay down as much debt as you can, and pay your bills on time every month. The higher your credit score, the better chance you have of getting both a good loan and a favorable rate.
2. Ignoring your rental history
If you’re currently renting, ignoring your rental history can be a mistake. A friend of mine recently applied for a mortgage through the USDA. She had to get a letter of recommendation from her landlord and a year’s worth of bank statements showing she’d paid the rent on time before she could be approved. Make sure you’re paying your rent on time every month leading up to your mortgage application.