What You Can Do to Qualify for the Mortgage You Want

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If you plan to buy a house soon, start thinking about the kind of mortgage you want. There are many options to consider, but most people want a low-interest loan for 15 to 30 years. For the best mortgage rates, here are some things you can do.

Pay Your Bills on Time

Make sure all your bills are paid by the due date to avoid late fees. Late payments can also lower your credit score, which is one of the main ways your mortgage loan eligibility is determined. If you have to pay late, contact the provider and explain your circumstances. Sometimes the company will add a note to your account that indicates you contacted them to make alternate payment arrangements.

Don’t Make Big Debt Purchases

Mortgage lenders will check your credit score and financial accounts to see how much debt you have. Large recent purchases raise red flags to loan application evaluators, so don’t buy anything major until after your home loan is approved, and you close on a property purchase. Avoid running up any kind of debt while waiting for your loan to be approved, as mortgage loans may be denied if you have a high credit card balance and keep charging.

Build up Your Savings

The mortgage lender will want proof of any savings you have. That could include a conventional savings account or an investment account. Sometimes a retirement account with a hefty balance will be accepted as proof of savings. The lenders impose this requirement to ensure that you have the means to cover several months of mortgage payments if you happen to get laid off from work or lose your job. They hope, of course, that you will be reemployed within a matter of months.

Pay off Debt Balances

If feasible, pay down or pay off current credit balances. While a reasonable amount of credit being used is not problematic to mortgage lenders, high balances may be questioned. Surprisingly, having a small balance on a single credit card may be preferable to using no credit at all. This may be due to the idea that lenders want to see that you can manage debt rather than avoid it altogether.

Try to get pre-approved for a mortgage loan before you shop for a house. A pre-approval can expedite the purchase offer by indicating you already have a home loan tentatively approved by the lender.


Anica Oaks is a professional content and copywriter who graduated from the University of San Francisco. She loves dogs, the ocean, and anything outdoor-related. You can connect with Anica on Twitter @AnicaOaks.


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