5 Tips From Your Neighborhood Lender

Maximize your credit score:

When purchasing anything nowadays, your credit matters. The higher your credit score, the lower your rate and the more money you keep in your pocket. Make sure to make all payments on time, of course as a first rule. Then do not max out your credit cards. The higher you are in your limit, the higher credit risk you are seen as, and your scores go down. Keep your balances as low as possible. Ideally under 10% of your limit, but if that is too much, try and get under 50%, and then continue to pay down monthly. Check your credit a couple times a year for medical collections. This often gets reported in a billing error with your insurance and if you dispute them, they most likely will be removed.

Don’t be afraid to max out your 401k:

Most people think all of their money needs to be in their checking and savings and you should not touch your 401k. That is an older school way of thinking and not correct. Your 401k is an investment tool. You can put pretax money in and allow it to grow, but also BORROW against it for down payment on real estate. Then you can pay yourself back, not be penalized and not lose any ground. The top 1% in the world do this with investment accounts/ life insurance accounts and don’t use their cash. Everyone else has been learning and adjusting their strategies and this applies to your 401k account as well!

Cash Deposits– while preparing to qualify for a mortgage:

Don’t make any large cash deposits into your account. You wont be able to use these funds, even if they are in your bank account. There are specific cases where this is allowed and you need to review with a licensed loan officer before making any larger deposits.

Review & Set Goals:

Review your budget and understand your goals before getting into purchasing a home. Most clients don’t understand what monthly payment they want, they just want to see how much house they can qualify for. But running a successful budget monthly is very important for your household’s long-term wealth and success. Do some homework on your budget and goals and then review that with your loan officer!

Don’t make any major purchases:

Sometimes that new car will stop you from buying your new house. Get your largest and most important asset figured out first, then buy that nice new car or take that nice long vacation. I cannot tell you how many clients that go out and purchase a brand new car and the payment stops them from purchasing their dream home. Slow down, think about the big picture first and speak to your loan officer before making any larger purchases.

Tips provided by Deibler Home Team