Welcome back! Are you ready to learn more about the most commonly made credit mistakes that might affect your chances of buying Raleigh real estate soon? Below, you'll find several things to avoid. If you missed our previous post, be sure to visit back with it!
Applying Too Many Times
When we get approved for one credit card, sometimes we feel the need to apply for several more. While it might seem nice to have more than one credit card, applying too many times will affect your FICO score. As we talked about in our last post, your FICO score is the main consideration when applying for a mortgage.
Ten percent of your score is determined by credit inquiries. Adding several to your credit report, right before applying for a loan could be detrimental. Why? For one, it looks as if you might be in financial trouble, needing more credit than normal to live comfortably. Because of this, lenders might be apprehensive to loan you money towards a home.
On the other side, there are many potential home buyers who have no credit at all. This is just as damaging as applying for too much. Fifteen percent of one’s FICO score is determined by credit history and the length of it. If there is no score at all, or it’s very limited, a lender might decide that purchasing a house isn’t the right thing for you at that time.
You can’t go back in time to fix this situation, but you can start working on your credit history now. Go out and get a credit card. Be responsible, make payments on time and don’t charge more than you can afford. Before you know it, you’ll be able to apply for and receive a loan for a new home!
Too Much Debt
According to money.usnews.com, “Aside from your FICO score, a number that heavily influences lending decisions is your debt-to-income ratio. To calculate your DTI, you’ll need to add up all your monthly credit payments (along with certain other obligations) and divide this figure by your gross monthly income. Although standards vary from bank to bank, most like to see a DTI of 36 percent or less. If you’re carrying a ton of credit card debt, your DTI might be too high to get a home loan.”
If this is the case pay off as much of your debt as possible; and as quickly as you can. Improving your DTI will help with buying Raleigh real estate and your home loan application.
If you have your credit in order after reading about these commonly made credit mistakes and you’re ready to start searching for the best Raleigh real estate around, contact Roark Premier Team, today!
Roark Premier Team | Raleigh Real Estate
If you’re considering buying a home, contact our real estate agent at Roark Premier Team, today! It's time to get started with the process of searching for your dream home. We will work with you, until you find your next home.
So what are you waiting for? Call now! We have real estate agents standing by to help you get your home sold during one of the busiest times of the year for Raleigh real estate!