Purchasing a home, whether it’s your first or last, is one of the biggest decisions you will ever make. Naturally, many questions will arise, so rest assured Bank 34 is here to assist you in
understanding the loan process. Our goal is to make your experience a smooth and pleasant one.
Before you start home shopping, it’s important to get pre-qualified on how much home you can afford. This will give you an idea of how much you will need for a down payment, closing costs and finding a home within your budget. We look forward to helping and guiding you through the entire process from beginning to end.
Complete the quick, simple and free Pre-Qualification Request Form on this page and we will contact you!
Your Credit Score & Home Loan Process
A credit report will not be pulled for a Pre-Qualification. However, once you formally ‘Apply’ for a mortgage for a Pre-Approval, a credit report will be pulled at that time.
Protecting your credit score is critical when you are in the process of buying a new home. Your rate and loan costs could be affected by even a slight change. Lenders want to know what your credit history is, and whether you have the ability to pay back the loan you are requesting. In short, good credit translates into lower rates and/or fees for the home buyer, and less risk to the lender. Credit scores can range between a low score of 300 and a high of 850. The higher the borrower’s score, the less likely he is to default on his loan.
Once you complete a loan application and enter into the loan process, there are precautions to take concerning credit. Lenders may wish to review credit again prior to closing, so any
major credit activity from loan application to closing can impact your approval.
Tips for protecting your credit score & your home loan process:
- Get up to date on any past due accounts and avoid making payments late.
- Pay down outstanding credit card debt. Try to stay below 25% of the credit limit.
- Limit applications for new credit such as a new credit card or department store line of credit.
- Do not make any large purchases. This includes buying items for your new home. Wait until your loan closes to purchase a new living room set, appliances or automobile.
- Do not close existing accounts. Length of history is important to a good score.
- Do not liquidate funds and keep your investment funds invested.
- Stay at your current job. Stability is important to your creditworthiness. A change now can affect your credit score and delay or derail your loan application.
- Do not deposit a large amount of cash, unless you can track its origin thoroughly and it’s allowed within your loan parameters. Hold off on borrowing cash from your mom.
- If you find an inaccuracy in your report, contact the agency reporting the error and let them know you’d like a correction.