Evaluate your Credit Well Before Beginning your Search for Homes in Scottsdale

A big part of any home buying process is applying for a mortgage loan. As part of this major process of purchasing a home in Scottsdale, lenders will require a copy of your credit report. These reports detail all of your long-term debt obligations, including credit cards, any other mortgages, car and student loans to name a few.

Real estate agents in Scottsdale and across the nation, me included, suggest that it’s a good idea to obtain a copy of your report several months before you submit a loan application for a home in Scottsdale. This will give you the chance to resolve any issues before your lending institution sees your credit report.

Credit reports are available for a nominal fee from your local credit bureau or directly from one of the three major credit reporting agencies: Experian, Equifax or TransUnion.

Keep reading to learn more about issues on your credit report that can affect not only whether you are approved for a mortgage loan but the interest rate as well.

Late payments

For most people with problems on their credit reports, late payments are the most common. If you were simply late on a credit card payment once or twice and have an otherwise solid credit history, it’s most likely no big deal. But if you have a history of late payments, you’ll need to document the reasons why.

A tattered payment history won’t necessarily result in denial of credit, but you may get stuck with a higher interest rate or have to otherwise prove that you can repay your loan in a timely fashion.

Errors on your credit report

Many people are surprised to learn that credit reports can often contain errors or inaccurate information. If you find yourself in this situation, contact the reporting agency or creditor to resolve the problem – which is sometimes a slow process so be sure to give yourself time to clear this up.

This illusrtates why we say you should obtain a copy of your credit report several months before you apply for a loan for a home in Scottsdale or anywhere.

Bankruptcies and foreclosures

A bankruptcy is bad news in any situation and having one on your credit report can be a problem. Not to say that it’s hopeless for you, but a bankruptcy or foreclosure will appear on your credit report for 7 to 10 years.

Lenders often consider the circumstances surrounding a bankruptcy, like family illness or injury. And if you’ve re-established good credit since the bankruptcy, lenders will take that into account when making their decision.

Being proactive and reviewing your credit report before applying for a loan for a home in Scottsdale will ensure the process goes as smoothly as possible. As a premier Scottsdale real estate agent, I want your experience to be a good one so if you have any questions about finding and financing your dream home in Scottsdale, please let me know.

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