Reduce Credit Card Utilization
Credit card utilization should never exceed 40 percent of your given balances, and never more than 45 percent on any one card. Banks look at this in the manner that you are a responsible borrower. To help your loan process out, make sure you pay down these balances to a reasonable threshold, which will improve your odds at getting approved.
Don’t Ding Your Credit with Inquiries
It can be tempting to apply to multiple banks to get a home loan. The experts advise that you instead take your time to research a bank and use one or two to run your apps. This will create fewer credit inquiries, which can demote points off your credit report. The fewer the hard inquiries, the more solid that your credit rating will remain.
Plan on Putting 20% Down
Most banks want to see an active credit score of 580 or higher and at least 20 percent down on your home loan. If you don’t have 20 percent saved up just yet, you can explore your options with grants and new home buyer loans. Or you may have to wait a while longer to get that dream house. Alternatively, you can pay a higher monthly payment by getting a loan that has insurance attached in case you default, called Private Mortgage Insurance or PMI in short.
Site last updated: 21. October 2020