Owning a home comes with many benefits such as tax deductions, more privacy, creative freedom, and it is an excellent investment in your future. But before you can start benefiting from this major purchase, it is important to understand the responsibilities involved in homeownership. Buying a home will most likely be the biggest expense you ever have. This is why it is important to have your finances in order so you can afford a Newnan mortgage.
Being financially prepared to purchase a home starts with having a stable income and a good credit score. So, to help provide some assistance, your local mortgage lender, Jeff Wilmoth with Homestar Financial, has listed three credit tips to get you ready for your first mortgage.
Tip #1: Avoid Opening Additional Lines Of Credit
When buying a home for the first time it is easy to think that everything you own must be new, such as needing a new car, new clothes, a new boat, or an RV. This, however, can cause you to be in even more debt which can negatively affect your credit score. Every time you open a new line of credit your credit score lowers, even if only temporarily. So, try to avoid making any additional large purchases (unless you have the funds to do so) to give your credit score some time to improve.
Tip #2: Pay Off High-Interest Loans
If you are currently struggling with a low credit score then try to pay off as much high-interest debt as you can. This includes paying off credit card debt and car loans. Owing the bank too much money can lower your credit score so try and pay off as many loans as you can before you make an appointment with a Newnan mortgage lender.
Tip #3: Don’t Miss Monthly Payments
Whenever you miss a scheduled monthly payment, your credit score is affected. So, to prevent this from happening and to help improve your score over time, be sure to make payments towards your loans every month. If you have trouble remember when something is due, you can set up an automatic deposit with your bank or set a reminder on your phone to go off every month when a payment is due.
For more information on how your credit score affects your mortgage or if you are interested in learning about different Newnan home loans, please contact Jeff Wilmoth with Homestar Financial at 404-597-5662.