You have made the decision to buy a home on your own. You believe that you are ready and prepared because you have saved, over a significant period, to accumulate the necessary advances and reserves. However, if you’re like many others, you probably haven’t focused enough on the effects and impacts of your credit cards, getting the best possible mortgage terms, or in some cases, how some factors might do. make getting a home loan much more challenging than it needs to be. None of us enjoy additional stresses and hassles, so this article will briefly consider, review, and discuss 4 examples and factors involved regarding credit card management, and do so wisely.
1. Balances on your credit cards: Lending institutions consider many economic factors, and a key one, which also affects your personal credit score, is your credit card balances. Ideally, they want to see that you are using less than half of your available balance. Several months before applying for a mortgage, be sure to reduce your balances and improve the ratio between available and used balances.
two. Number of accounts / cards: Most credit institutions and credit rating organizations do not want to see more than about 4 to 6 accounts. Each of these should be, according to the discussion on balances, discussed above.
3. Debt: Take a closer look and consider how your credit card balances, when added to other personal and / or consumer loans, such as car payments, lines of credit, etc., relate to your income. Mortgage lenders have strict requirements, both for the ratio of mortgage debt to income, and for total debt and income. Unless you qualify in both areas, conventional mortgages can be extremely difficult and challenging to obtain and receive. Another issue is considering your personal comfort zone and how credit card debt and monthly payments can create additional stress and hassle.
Four. Recent open accounts: If you are planning to buy a home, in the near future, it is essential to avoid adding any additional debt to your existing debts. In my more than a decade as a licensed real estate salesperson in New York State, I have witnessed, in far too many cases, where people damage and / or destroy their opportunities and / or opportunities, by accepting some credit card offer, due to some perceived benefit. For example, when you’re shopping at a retail store, resist opening a credit card at that store, because the short-term profit could potentially have negative ramifications.
Smart consumers proceed, in a prepared manner, to make their home buying, their experience, smoother and better. Manage credit card accounts wisely and be prepared!