Financial Tips for Those Looking to Buy a House

I would highly recommend looking at your credit and financial status about a year to two years before you want to buy a house. This is especially important if you have bad credit or credit that is need of some repair. Keep in mind that the better your credit score the less you will be paying in interest rates and points. This is very crucial as it can save you literally tens of thousands of dollars over the lifetime of your mortgage loan.

If you pull your credit and discover that you have a few flaws and blemishes on there do not despair, there are ways to help repair the damage. While there is no legal way to take bad or blemished credit and suddenly make it sparkle as some companies claim, it is possible to improve your overall credit appearance. Improving the appearance can be very crucial to lowering your interest rates.

While many lenders only look at credit scores, they are rare. Most lenders especially for a house will personally look over the credit report to see why your score is what it is. Most lenders are also experienced enough to know if your credit score is bad because of negligence, or because you have been working on cleaning up your credit. Wait, did I just say they would know your score was bad because you have been cleaning it up? Yes, it is true that making an old negative account active again by paying it off or making payments on it can temporarily reduce your credit score.

Keep in mind that while your score may fluctuate, you never want to approach lenders with unpaids and collections on your credit file. Do what you can to get those paid off. Call and write letters to the companies that you owe money to and ask them for a settlement offer. If you are feeling brave offer then a settlement amount, usually somewhere between 50%-70% will achieve an acceptance. This is great because you can save money, still clean up your credit and happily move along to the next company.