Are you getting ready to buy or refinance a house? Laying the groundwork ahead of a purchase or refinance can make the whole process go more smoothly for you and for the professionals you will be working with to achieve your goals.
The most important thing is your credit score. Download the apps CreditKarma (Transunion) or Borrowell (Equifax). Both are free and do not impact your credit score. They are updated frequently throughout the year and provide you with your current credit score position and historical information.
Your aim is for a score of over 700. 800 and above is excellent. Low 600 and lower means you need improvement. If that is the case, hold off on hiring a mortgage broker or having your bank pull your credit reports until you are ready.
Things that impact your credit score – late payments; banks and credit agencies pulling your credit report; collections and judgments.
Things that improve score – keeping your balance for each credit item below 50% of the total credit amount; making payments on time; longevity of credit accounts; cleaning up any outstanding issues you weren’t aware of (for example, if you changed cell providers and not realize there was a small balance owing that was sent to collections).
Once you are ready to buy or refinance, you don’t want to scramble so cleaning up little issues on your credit score can make your approval for a mortgage much more seamless.
These steps cost you nothing and it can save thousands of dollars in interest savings on a mortgage, or in fact any credit you need for a car loan, rent approval, or job application in certain circumstances.
Once you have your credit where you want it and are ready to refinance or buy, in addition to retaining a mortgage broker and a realtor, also contact your lawyer once you have a draft contact or signed mortgage approval in place. You can call your lawyer with questions at any stage of the process and they encourage you to do so.
In particular, your lawyer can advise you about any closing costs you may not be aware of such as title insurance, appraisal and inspection costs, legal fees, land title fees, and adjustments for taxes as well as identification and residency requirements for various tax and fee exemptions.
Being prepared and getting professional advice is the key to success with any purchase or refinance!