If you are thinking about buying a home this year and aren’t sure if you will qualify for a mortgage, there are several actions you can take to improve your chances of being approved for the amount you wish to borrow.

Lenders look at more than just your credit rating. They want to know that you have a steady income and are responsible with your money. Before you start home shopping, take some time to make sure you are fiscally stable.

1. Stay at your present job. The bank will want to see, at minimum, your last two tax returns. If you want to buy a home this year, it’s not the time to start over in a new industry. If you are just getting started in the professional world, you may need to work a while longer in order to show a history of steady income
2. Put off buying a new car. Be careful about buying big-ticket items like a new car, a boat or even furniture on credit until after you have closed on your home.  This is not the time to be applying for new lines of credit or increasing your debt-to-income ration.  The more debt you have, the less house you can afford.
3. Pay down credit debt. If you are carrying a balance on credit cards, work hard to pay those down or off. Try not to use credit cards if you can’t pay the balance off monthly.  If you don't have the option of paying off your cards entirely, a good rule of thumb is to keep your balances below 30% of your limit.
4. Pay your bills on time.  Incurring late payments will reflect poorly on your credit report, so keep track of deadlines or set up automatic payments before they are due.  Your payment history has a 35% impact on your FICO score.  So paying your bills on time has a huge impact on keeping your scores up.
5. Save up cash for a down payment.  A typical down payment is anywhere between 3 and 5% of the purchase price of the property.  Lenders prefer to see the downpayment amount saved and "seasoned" over time.  If you suddenly have a large influx of cash into your account for the down payment amount, you will probably need to provide and explanation where these funds came from.
6. Say no to cosigning for others. Now is not the time to cosign on any loans with family members or friends.  (Remember tip #2...no new lines of credit).
7. Throw those credit card offers away. Each time you apply for credit, the provider will pull your credit history, which affects your score.  And you definitely don't want the lender to see that you are increasing your level of unsecured debt.

If you have any questions I am always here to help.  You can reach out to me by phone at 702.805.4480 or by email at lisa@MakingHendersonHome.com.  I look forward to hearing from you!!