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Mortgage
Glossary | All About Adjustable Rate
Mortgages | Getting Your
Finances in Order
Your Credit History | When
Should You Pay Points on a Loan? | Saving
for the Down Payment
Closing Costs
As part
of the loan application process, virtually all lenders will
want to see a copy of your credit report. The report will
list all your long-term debts (credit cards, mortgage payments,
automobile and student loans, etc), as well as your payment
history. If you don't have a copy of your credit report, most
lenders will generally require you to pay for a copy when
they process your loan application.
However,
most real estate experts agree that it is a good idea to obtain
a copy of your credit report several months before you apply
for a loan. This is so you have a chance to resolve any problems
with your credit before your bank sees it. U.S. Federal law
ensures that you have access to your credit report, which
may be obtained from your local credit bureau or any of several
national firms that specialize in credit reports.
Late
payments
For most people, problems with their credit report are likely
related to late payments on a debt. If you were late one month
in paying off your credit card, but otherwise have a good
payment history, chances are most lenders won't be too concerned.
But if you have a history of late payments you'll need to
document the reasons why. A slow payment history won't necessarily
get you turned down for a loan, but you may have to pay a
higher rate of interest or otherwise prove to the lender that
you can repay your loan in a timely fashion.
Errors
on your credit report
Many people are surprised to learn that credit reports can
often contains errors or inaccurate information. If this is
the case with your credit report, you'll need to contact the
reporting agency or creditor to have the problem resolved.
This can sometimes be a slow process, so make sure to give
yourself time to clear up the mistake.
Bankruptcies
and foreclosures
There's no getting around it, a bankruptcy on your credit
report is not a good thing. But that doesn't mean you still
can't obtain a loan. Even though a bankruptcy may stay on
your credit report for seven to ten years, lenders will often
consider the circumstances surrounding a bankruptcy (family
illness, injury, etc.). Moreover, if you have reestablished
good credit since the bankruptcy, a lender will be more inclined
to approve your application.
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