Credit Tips for Home Loans


Credit Tips for home Loans


5 Easy Credit Tips for a Smoother Loan Approval

Even with the tighter credit guidelines used in today’s mortgage financing, your mortgage experience doesn’t have to be a stressful, overwhelming headache! You’re in a great position to set yourself up for success. The earlier you learn how your credit is influenced, the better off you’ll be for a loan approval


  1. Avoid purchases using credit such as furniture, appliances or cars until after your loan closes. When you open a new account, even with “no payment due until next year”, your credit will still get checked and will lower your credit score slightly. Fannie Mae requires a credit report to be pulled right before closing. If there are inquiries on the report, they could void your approval.
  2. Try not to charge any atypical or excessive amounts on your credit cards.  Use the 10% tolerance rule. It is best to show responsible use of credit during the approval process.  If your payments go up on your credit cards, the payment you qualify for on your home purchase may go down.
  3. Keep your existing accounts. 
    Any activity on your credit accounts will initially cause your score to drop — even closing existing accounts. It is best not to change your credit picture in any way without you and I speaking first.
  4. Restrict credit checking to only your mortgage lender. 
    Your credit will be checked initially for your pre-approval. Having your credit pulled again can lower your score and at a minimum require a letter of explanation indicating that no new credit was established.
  5. Receiving monetary gifts from a relative?
    Inform me as early as possible. Lenders are required to follow a specific process and set of rules when it comes to monetary gifts used for closing costs or down payments. I will be able to walk you through the process step by step to ensure your gifts will be able to be used.