2. Credit and Finances

Determine Your Credit Status

Because any lender you apply to for a mortgage will verify your credit history, it’s wise to check your own credit rating in the beginning of your home search, even if you’re sure you have an excellent credit record. There may be blemishes in your credit history that you don’t know about. Identifying and resolving any credit problems to improve your credit rating will provide benefits, such as preferred rates from lenders and home insurers. Acquiring a copy of your credit report is simple.

The Fair Credit Reporting Act allows consumers to obtain one free credit report from each of the three major reporting bureaus every 12 months. To obtain a report visit: www.annualcreditreport.com – the only authorized source for consumers to access their annual credit report online for free. Or, call 877-322-8228.

The three major credit bureaus:

Equifax Experian Trans Union
www.equifax.com (formerly TRW) Corporation

Information Service Center National Consumer www.transunion.com

P.O. Box 740241 Assistance Center Customer Disclosure
Atlanta, GA 30374-0241 www.experian.com Center
800-685-1111 P.O. Box 949 P.O. Box 390
Allen,TX 75013-0949 Springfield, PA 19064-0390
888-EXPERIAN 800-888-4213

Pre-qualification vs. Pre-approval

Typically you will first pre-qualify for a mortgage, then get pre-approved before you have found the specific home you wish to purchase. What is the difference?

Pre-qualification: An informal determination by a lender or mortgage broker stating
the amount of the mortgage you can afford.

Pre-approval: A guarantee in writing by a lender to grant you a loan up to a specified