Buying a home is a costly affair that requires careful considerations and planning. It is a financial investment that can improve or ruin your financial stability. Hence the need to practice caution when searching for a house to buy.
Purchasing a home is a cost-intensive venture and the asking prices northward of $200,000 puts them out of range for many people. Luckily, a thriving mortgage industry steps in to help people bridge this gap in their finances. Unfortunately, most prospective home buyers don’t take a moment to understand how the mortgage industry works and this leads them to make costly mistakes.
Before a lender can approve your application, they take a fine-tooth comb through your finances. They need to be sure that you don’t pose a risk to their investment. If a lender such as the Altius Mortgage Group likes when they find in your financial history, you are assured of getting the best mortgage rates in Utah.
Pay your bills on time
Well, you’re applying for a loan that comes with monthly payments. It’s only natural that lenders will look at the way you pay your bills. After all, they will be expecting you to make these payments without delay whenever they are due. If you are prompt in paying your dues, it sends a message of encouragement to the lender. Better yet, it also boosts your credit score. See, your payment history makes up 35 percent of your credit score. At just above a third of the score, payment history is the weightiest factor in your credit score. Missing a single payment has a drastic impact on your credit score and can result in a considerable dip.
Go easy on the credit cards
While convenient, credit cards carry double-digit interest rates and as such, the amount of debt on them tends to balloon. Failing to pay your credit card on time leads you to incur additional fines and penalties which increase the debt you carry. If you’re carrying a high credit card debt, it means that you’ll be channeling a considerable amount of your income towards trying to offset it. That leaves you cash-strapped and unable to meet your other financial obligations. Additionally, when you credit card utilization goes beyond 30 percent, your credit score takes a hit. Given that your debt utilization accounts for 30 percent of the credit score, the effects could be drastic.
Qualifying for an affordable mortgage is the key to successful homeownership. Hence, you need to make every effort necessary to keep the interest rates low and affordable.