Homebuyer Tips for Your First Home Loan
Before you start shopping for a new home or a home loan, here are some steps you can take to ensure that you are ready to buy – and can be best prepared to qualify.
1. Check Your Credit
Review your credit report to see if there are items that are not correct, and work on resolutions. To qualify, your credit score should be at least 580.
2. Check your affordability
Use our Affordability Calculator to determine how much house you can afford.
3. Determine Your Home Budget
Use our Mortgage Calculator to determine various payment scenarios.
4. Review Your Loan Options
Check out our Loan Solutions for different types of loans. For example, some loan solutions do not require a down payment or have flexible qualifications, making them perfect for first-time homebuyers.
5. Get Pre-Approved for a Home Loan
Work with one of our friendly Loan Partners to get pre-approved and start shopping for your new home..
Smart Credit Practices
Pay your bills on time.
Late payments stay on your credit report for seven years, so be sure to pay your bills on time.
Pay credit balances strategically.
A good guideline: Use less than 30% of your limit on any card. Lower is even better. The highest scorers use less than 7%.
Ask for higher credit limits.
When your credit limit goes up and your balance stays the same, your overall credit utilization is lower, which can improve your credit. If your income has gone up or you've gained positive credit, you should be able to get a higher credit limit.
Dispute credit report errors.
A mistake on one of your credit reports could be pulling down your score. Disputing credit report errors can help you quickly improve your credit.
Deal with collections accounts quickly.
If you have any collections accounts, pay them off quickly and work with the creditor to report the pay-off to the credit reporting agencies.
Use a secured credit card to rebuild your credit.
Build or rebuild your credit with a secured credit card, which is simply a card that backed by a cash deposit that acts as collateral for the card.
Get credit for rent and utility payments.
Work with a Rent Reporting Service to get your on-time rent and utility payments added to your credit report. In addition, Experian Boost™ is a free service that links your bank accounts for your credit report, so you get credit for on-time payments to monthly bills, such as cable, Internet, streaming or mobile phone services.
Add to your credit mix.
If you only have credit cards, get a personal loan and pay it off without any late payments.
What not to do before you apply for a home loan and before your loan closes.
1. Don’t make any large purchases, such as buying a new car, furniture of appliances.
2. Don’t incur new debt of any kind.
3. Don’t max out your credit cards.
4. Don’t close any credit card accounts, even ones you don't use.
5. Don’t forget to check your credit score and report. AnnualCreditReport.com is a free service that checks all three credit reporting agencies.
6. Don’t forget to work on credit report solutions.
7. Don’t be late on any of your bills.
8. Don’t change jobs.
9. Don’t co-sign on any loans.
10. Don’t make any big deposits without providing verification to your lender (such as a gift letter).