GetSmart.com Suggests Ways to Get a Financial House in Order Before Buying a New Home

Before purchasing a home, it's wise to get your personal finances in order. Check out the following tips from GetSmart.com.

Charlotte, N.C. (PRWEB) July 18, 2007 -- Whether it's a long or short term goal, becoming a home owner may be in your future. And since a home is often the single largest investment a person will make, you will likely need to qualify for a mortgage in order to cross the threshold.

Thinking about the home buying process (http://www.getsmart.com/loan-resources/Finding-the-Right-Home/10-Reasons-to-Buy-a-Home.aspx?&esourceid=707570&esourceid=707570) in advance is a smart move. GetSmart.com suggests the following tips to help you get ready before you purchase a new home:

Know your credit score.

It's amazing the number of people who apply for a mortgage without knowing their own credit score (http://www.getsmart.com/loan-resources/Credit-Scores/FAQs-About-Credit-Scores.aspx?&esourceid=707570&esourceid=707570) or having requested a copy of their credit report. It's always a good idea to check your credit report and make sure it's accurate, but it's even more important in the 60 to 90 days prior to applying for a loan. Review all of the information for inaccuracies and make sure to contact the credit reporting agency immediately if you find any problems.

Be cautious with credit.

Mishandling credit is one of the top ways that borrowers usually get themselves into trouble. Lenders like to see applicants who have a small number of credit accounts and who pay those accounts on time. Too many credit accounts can hurt your cause, but too few can as well. Lenders want clients who have demonstrated they can be fiscally responsible with the credit granted to them.

Just as you shouldn't open any new credit accounts in the months leading up to actually applying for a loan, you shouldn't close any accounts either. Doing so reduces your overall available amount of credit, and it can end up increasing the percentage of available credit you are using.

Pay your bills.

While this might not seem like it needs repeating, it does. Paying your bills on time puts you on the fast track to creditworthiness with lenders. Paying down outstanding debt (http://www.getsmart.com/loan-resources/Getting-Out-of-Debt/5-Steps-to-Getting-Out-of-Debt.aspx?&esourceid=707570&esourceid=707570) has the same effect. Remember, improving your credit and making yourself attractive to a lender doesn't happen overnight; it can often take months to adjust your credit score. But taking the time to do so can not only make you more appealing to a lender, it can also help save you money by qualifying you for the best interest rate possible.

Keep your job.

An employment record is also a part of your overall credit profile. Lenders prefer a reasonable period of stable employment, so if you're intending to take time off or change jobs, it may be better to wait a while.

No large purchases.

Although it may be tempting to get a brand new car to pull into the drive way of your soon-to-be new home, it's better to refrain from making large purchases just prior to purchasing a new home. This type of transaction will likely have an affect on your credit score because your debt to income ratio has just changed. Your debt to income ratio is a factor that lenders evaluate seriously so make sure not to make any large dollar purchases just before applying for a mortgage.

For more information on how get your financial house in order, visit www.getsmart.com.

About GetSmart®

GetSmart is a leading financial services marketplace that offers borrowers access to a range of home loan products such as mortgages and refinance loans, home equity loans and lines of credit from a network of more than 250 lenders. Consumers who visit the site at www.getsmart.com of call 1-800-GETSMART complete a short and simple form and will then be matched with up to five competing lenders.

GetSmart is owned by LendingTree, LLC, which is an operating company of IAC.

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