Getting ready to buy a home? Now isn't the time to make any major financial changes. Major money moves while you're in the market for a new home can make the mortgage application process much more challenging. Here are a few tips:
1. Think twice about canceling credit cards you haven’t used in years. Using only a low percentage of your available credit may assist in proving you can live within your means and may boost your credit score.
2. You may want to avoid refinancing a car loan or other long-term debt in order to pay it off sooner. Your monthly debt-to-income ratio can be a factor in deciding your credit score, and adding more monthly debt in the form of higher payments over a shorter term can make it harder to achieve the ratio your lender may require.
3. Rethink transferring credit card balances to a new lower-rate card. A history of long relationships with a few credit card issuers is another possible score booster. It shows you are reliable and credit worthy over the long term.
Any sudden or large-scale financial moves could be frowned upon by lenders and might have a negative effect on your credit score. Best advice? Ask for guidance from your lender. They can help you avoid any missteps on the journey to landing a mortgage loan.
About the Author:
Utah Dave - Daybreak Neighboorhood Expert and Local Resident
My friends nicknamed me Utah Dave in high school because they said it didn't matter where we went in Utah, I would know how to get there and who we needed to talk to. The name sticks today as UtahDave has formed into a professional real estate network of Neighborhood Experts all across the state. I live in Daybreak with my wife and 4 amazing children. I enjoy dancing (which is how I met my wife Dawn) as well as traveling, coaching, and learning.
