One of the first, and most important things you need to do before applying for a mortgage is getting your credit score in order. If you have bad credit, you most likely will not get approved. But, once you apply, what happens then? What exactly do they look at, and how do they decide whether you’re approved or not? It’s not as simple as having a score above a certain number. Check out this post by Diane Beaumont at Active Rain for more info:
-Your scores will have a direct impact on the interest rate that you qualify for or if you qualify for a loan at all.
-Your debt balances will be reviewed to determine your debt-to-income ratio. Essentially, the lender will determine if you are able to make your payments on time as scheduled or if your debt balances appear to be burdensome.
-Your mortgage lender will also review the number of late payments on your credit report as well as the dates for those late payments.