Thinking of Buying a New Home – Don’t Forget to Prepare

They say that every crisis has its upside, and the recent meltdown in the subprime housing market has created a buyer’s market in many parts of the country. Suddenly homes that were unaffordable a few short years ago are within reach of the average wage earner, and many smart renters are looking for ways to get their piece of the American dream.

If you are one of those looking forward to owning the roof over your head, it is important to prepare for this important decision. After all, a home is the most significant purchase many of us will ever make, and it is vital to understand the factors that can affect your mortgage, your interest rate and your financial future.

While there are many ways to prepare for the purchase of a new home, perhaps the most important is to obtain a copy of your credit report. Knowing what is in your credit report before potential mortgage lenders do can help you fend off any potentially negative information, and that can lower your interest rate and keep your payments affordable.

By pulling a copy of your credit report well in advance of shopping for a home you will be able to correct any erroneous information you find. A surprising number of credit reports do contain errors, so chances are good that you will find at least one or two corrections. When you do find an erroneous entry on your credit report, be sure to notify the credit reporting agency immediately. Those agencies are required by law to verify the information you challenge, and if that information has been placed there by error it must be removed.

This simple credit report cleanup process can help you take advantage of the low interest rates and superior terms that make today’s mortgage market so attractive to new buyers. With formerly freewheeling lenders taking pains to correct old mistakes, the significance of a clean credit report has never been greater. So be sure you know what the lenders will be looking at as they evaluate your application for a home mortgage.

© Allison Van Wig