How Your Credit Score Impacts Getting a Mortgage
Your credit score plays a significant role in mortgage pre-approval. Lenders require an acceptable score based on product guidelines. If your score needs improvement, here are steps you can take:
- Pay bills on time: Payment history makes up over a third of your FICO score. Pay bills promptly to avoid negative impacts.
- Keep good debt on your report: Paid-off accounts with positive histories help your credit score.
- Dispute errors: Correct inaccuracies on your credit report through Equifax, Experian, or TransUnion.
- Settle collection accounts: Paying them off, even for less, can help improve your score.
What Happens After You Apply for a Mortgage?
- Processing: Loan processors gather and verify documents like credit, income, and assets to meet lender requirements.
- Underwriting: Underwriters review your file against lender guidelines and issue a decision.
- TRID Disclosure: You'll receive a closing disclosure to review estimated costs before scheduling your closing.
- Closing: Final documents are signed, funds are disbursed, and ownership is transferred. Closings typically take about 45 days from application to completion.
What to Expect at Closing
At closing, you'll review and sign documents, finalize payments, and officially take ownership of your home. Be sure to review closing disclosures provided by your lender ahead of time to understand costs and required documents.
