If your goal is to purchase a home within the next year, now is the right time to start preparing. There are three factors used to determine your mortgage qualification. Awareness of these three factors can truly help improve your financial security when buying a home and increase the strength of your mortgage qualification.  The first step is:

 

Credit Scores

The higher your credit score, the lower your interest rate and down payment can be. There are five factors that determine your credit score.

‌• Payment History: (35% of your score)

Ensure that you are making all of your payments on time.   

• Amounts Owed: (30% of score)

High balances and maxed-out credit cards will lower your score. Keep account balances as low as possible, especially on revolving accounts such as credit cards.

• Length of Credit History: (15% of your score)

In general, longer credit history will raise your score. After paying down or consolidating debt, be selective when closing your accounts. The longer the account is open, the better.

• Mix of Credit: (10% of your score)

The different types of credit you have will also affect your score. Installment debt like auto loans and personal loans are scored higher than revolving debt such as credit cards and lines of credit.

• New Credit: (10% of your score)

Applying for credit will affect your score. Multiple inquiries for the same product such as a mortgage that occur within any 45-day window are treated as a single inquiry for scoring.

We recommend reviewing your credit report now to ensure there is no fraud or errors with your credit. Six months is a comfortable time-frame to fix most issues with your credit. Each year you can access your credit report for free by visiting www.annualcreditreport.com.

To apply for a mortgage loan, you can visit Verity Credit Union’s Online Real Estate Center. If you would like to speak with a financial services specialist to discuss your debt-to-income ratio, your credit scores or strategies on how to reduce your closing costs and down payment requirements, you can call 206-361-5320 or email mortgages@veritycu.com.

Jeremy Sankwich

Hello, I’m Jeremy – I manage the business development efforts for Verity’s mortgage department.  My passion is in helping Verity members down the path to financial freedom and home ownership. I try to go beyond the mortgage loan when helping members as I discuss real estate and financial education.

I have a degree in financial services and financial management from California State University.  I currently live in Auburn, WA with my wife and baby on the way.

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