If you think you have “perfect” credit, think again. Credit history that has accumulated that doesn’t really belong to you will not help you when applying for a mortgage. This is especially applicable to young people who remain on their parents’ credit cards as “authorized users.” You may think it looks good, but most lenders will question it, even if the payment history is spotless. If you want to qualify for a mortgage within the next few years, your best bet is opening your own line of credit and making all of your payments on time.
Most lenders want to see at a minimum two years of steady income. You don’t have to be salaried to get a mortgage, though. If you work multiple jobs or receive hourly pay, simply obtain an employment verification that clearly states your income. This will help your lender see that you mean business.
Don’t withdraw or deposit big sums of money while applying for your mortgage. Big cash withdrawals look suspicious to the bank, and this could prevent your application from getting approved. Any large deposits should be carefully tracked and sourced to avoid raising red flags. If you are gifted a large amount of money from someone, make sure to write a gift letter that outlines the transaction and indicates that there is no expectation of repayment.
Most of us have at least a little debt, whether from student loans or credit card purchases. Deep debts, however, can actually affect your payment-to-income ratio. If this ratio is too high, you may be unable to qualify. Lenders use this ratio to see if you’ll be able to make your monthly mortgage payments. If your ratio is too high, it’s best to reduce your loan payments or lower your proposed mortgage payment. This will improve your ratio and your odds of getting approved for your home loan.
Our team of highly engaged mortgage professionals provide a full scope of home solutions designed to help families reach their homeownership goals. Contact the Park City Credit Union mortgage team in Merrill, Tomahawk, Rhinelander and Minocqua today at 715-536-8351.
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