Why You Need to Call a Lender BEFORE You’re Ready to Buy!

Considering buying your first Indianapolis area home?  Then you may also be wondering how high your credit score needs to be or when you’ll be ready.  We recently received a similar question from a first time buyer:

“We are looking to buy a home here in a couple years and were wondering if you could give us a little bit of insight into the process. We are currently rebuilding our credit, and paying off debts. What sorts of things do mortgage companies look for when deciding whether or not to approve loan requests?”

 Our recommendation is to begin a conversation with a good lender right away.  You may think “shouldn’t I wait to talk to a lender until my credit and finances are in perfect order?”  No!  Loan officers consult with potential buyers every day – so don’t be embarrassed or overwhelmed if you’ve missed a few payments, have a bankruptcy in your past or some other event that may be causinWe Trust Kristing your credit to be less than ideal!  They want to help you!

And it’s easy!  Information gained from a quick phone conversation will enable a good loan officer to provide specific advice about things you may need to do now to be ready to purchase a home in the future.  They will help you figure out the best game plan and make sure you don’t do something that could actually hurt your credit score.  For instance, wouldn’t you think paying off debt is the best thing to do? – Not always!  A lender may suggest that a better solution would be to make sure each revolving balance is below 30% of the high credit limit.

So how good does your credit need to be?  Generally speaking, at least a 620 score, and the debt to income ratio should be somewhere between 41% and 49% depending on the client.

 

It’s also a good idea tocredit report clip art pull a free credit report directly from the repositories once a year.   Don’t bother spending extra to get a credit score, because the consumer credit scores vary from the scores a

 

lender gets when they pull them.  Just get the report and share it with a loan officer who will be able to point out any red flags that need attention.

Even though you may still be a couple of years out, it’s never too early to get a lender involved, so you’re ready when the time is right.  Then the loan pre-approval process will be a piece of cake!

Ready to start the process?  Kristin is one of our favorite lenders and she’s super helpful and easy to talk to.  Don’t wait – give her a call (and be sure to tell her we sent you)!

Kristin Jones
Senior Manager
317-506-3944
kjones@jonesmortgagegroup.com

Get  “Step by Step Instructions to Pull Your Credit Score for Free”  Click Here to Download

About the Authors: Steve and Tonda are co-owners of The Hoagland Group -- a small family real estate team specializing in helping families make great moves. How can we help you?

Leave a Reply

You must be logged in to post a comment.



All Information believed to be reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change, or withdrawal. Copyright © 2017 Metropolitan Indianapolis Board of REALTORS®. All rights reserved.