An important early step in purchasing a home is to get a lender’s “pre-approval” for financing. Then you’ll know how much home you can afford before you start your search. You’ll also make a strong impression on sellers, because they’ll know that your offer is solid.
Another step to take before you talk to the lender about pre-approval is to get copies of your credit report and review them thoroughly. Smart consumers shop around for the best prices, and you want the best interest rate possible. If your credit report contains errors, you jeopardize your chances for the best rate.
Lenders review reports from The Big Three – Equifax, TransUnion and Experian – and you should, too. Interest rate tiers are based on your credit score – the higher your score, the lower the rate. The lower the rate, the more home you can afford!
Get a copy of your credit report a couple months before you start looking at homes. Creditors usually have thirty days to correct errors, but give yourself some wiggle room. Verify that the debts are correct and belong to YOU (not someone else at the same address or with the same name). Your realtor will work closely with the lender to take this important step to prepare you for the home buying process.
You’ll be amazed how many doors open for you with a clean credit report and low interest rates. Now you’re ready for some happy house hunting!
Note:This article was originally published on this site on June 9, 2016. It has been updated reflect the current home market.