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Credit Habits to Break Before Applying for a Mortgage Loan

By Mike in Buying Tips with 0 Comments

If you are considering buying a new condo, loft, or penthouse in Downtown San Diego, take a close look at your current credit habits. If you’re like millions of other Americans, there is a real chance that some of your habits will make it difficult to secure a mortgage loan.

1. Failing to Monitor Your Credit Report

You can get one free credit report each year through AnnualCreditReport.com. Use the opportunity to look for inaccuracies and remove them from your report. This can boost your score.

2. Making Minimum Payments

Your credit utilization ratio has a large impact on your credit score. If you’re only making minimum payments and carrying a high balance, chances are you will have a hard time showing a lender that you can make monthly mortgage payments.

3. Using Cards to Get the Points

Credit card companies entice people by offering them points. People then use their cards for everything from grocery shopping to booking airline tickets. According to a study by the American Economic Association, people who have rewards and points cards that offer a one percent return spend an additional $68 a month. These cards can hurt your credit utilization ratio and the payoff is usually not enough to justify the extra debt.

4. Fearing Credit

A lot of people are afraid of credit because they don’t want to get in over their heads. Unfortunately, failing to establish credit makes it hard to get a mortgage loan. Open credit accounts but do so with caution.

5. Cosigning for Others

It is normal to want to help family and friends, but cosigning on loans could keep you from getting the Downtown San Diego condo or penthouse you want in 2016. If the person defaults, you will be on the hook for the money, which will lower your chances of getting a mortgage loan.

Once you get your credit in good shape and feel ready to move forward with finding a condo, loft, or penthouse in Downtown San Diego, let the friendly and professional real estate experts at 92101 Urban Living help. We specialize in the area, including condos for sale in Cortez Hill, Little Italy, East Village, Marina District, and the Gaslamp. Reach out today! ')}