Mortgage Applications and Borrower Credit Scores

Credit Scores pic

Credit Scores
Image: forbes.com

As president of the Priority Mortgage Group, which does business as Priority Financial Group, David Gomez leads the company in originating and distributing property loans. Mr. Gomez upholds a service-oriented culture in which the Priority Mortgage Group educates clients about the mortgage process.

Before applying for a mortgage, a borrower needs to make his or her application as appealing as possible to the lender. This often means improving one’s credit score, as this number plays a key role in determining not only whether a person will receive an approval but also the interest rate that he or she will pay.

Sometimes, raising a credit score requires simply that the credit holder examine his or her credit report and address any errors. For many, however, the process is longer and involves lowering the percentage of available credit that a debtor is using. Most lenders prefer that a borrower is using 30 percent or less of his or her available credit, and that no more than 36 percent of a borrower’s gross income go to credit obligations.

Many borrowers find that paying off loans can improve their credit score. Potential applicants may also wish to avoid opening any new loans or taking any action that requires a credit check. Similarly, because creditors monitor a borrower’s finances, it can serve the borrower not to make any major purchases until the property purchase is final, even if the borrower can fund the purchase in cash right away.

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