Kowalski Company

Buying and Selling Homes made easy!

Kowalski Company - Buying and Selling Homes made easy!

How Your Credit Rating Affects Your Home Loan

One of the most important things you will ever do as an adult is apply for a mortgage loan. Buying a home is a multi-faceted experience that will teach you a great deal more about how to handle your finances than any business course ever could. One factor that can have a huge impact on your home loan is your credit rating, and if you have never checked your credit report or requested your credit score, then the American dream of owning a home may be out of your reach before you know it.

What is a Credit Rating?

Credit History

Credit History

A credit rating is a compilation of all your credit activity within a given month. It includes reports from your landlord, your credit card companies, and from retail stores where you carry a credit balance. Credit bureaus such as Experian, TransUnion, and Equifax then create your credit rating based on information such as how much you owe, whether or not you pay late, and whether your account is in good standing. The better your rating is, the higher the score.

How a Credit Rating Affects Your Mortgage

Your credit rating can affect everything about your mortgage loan, from whether or not the bank will even lend to you to the type of mortgage rate you’re offered. If you have a low credit score that’s the result of late payments and past-due accounts, you will end up paying a higher monthly payment, as well as thousands of dollars in interest over the life of the loan.

If you’re planning to buy a home soon, then checking your credit rating should be one of the first steps you take. Not only will this give you a chance to clean up your credit and raise your score, but it will also allow you to verify that all the data is accurate so that you do not become financially responsible for any fraudulent charges.

Maintaining Your Investment as Landlord

You’ve just bought a new investment property and visited creditreport760.com to double check that your credit is fine. You have a solid ten year plan, you’ve thoroughly inspected every square inch, and you are ready and eager to accept tenants. But before you take out an ad in the local paper, there are a few things you should consider. The following points may mean the difference between a well maintained investment and financial dead weight in the future.

The “Dos”:

  • Do interact with your tenants

Some landlords feel that once tenants have moved in, no further interaction with them is required. However, regular interaction with your tenants and attention to their concerns will show them that you want to take care of them and they in turn will take care of your property.

  • managing-maintaining-rental-property2Do invest in property maintenance

If you fail to address necessary maintenance on your property, it will come back to haunt you in the future. When it comes time to sell, you’ll be dealing with an un-renovated property which is going to burn a hole in your wallet.

The “Don’ts”:

  • Don’t rely on condition reports

Condition reports can be misleading or downright dishonest. Nothing beats seeing the property with your own eyes. You’ll be able to spot issues and necessary repairs that may have been omitted from the report.

  • Don’t delay necessary repairs

That thing that is merely a minor problem today could become a huge issue further down the road. Every property will require regular upkeep. It’s far better financially to address repairs early on.

For more tips, check out:

Being a Landlord: Is it Worth It?

5 Things You Should Know Before Becoming a Landlord

8 Issues with Buying Property and Becoming a Landlord