How To Get A Mortgage: 7 Steps To Success (Review)

Buying a home is one of the most exciting things you’ll do in your life. It’s also likely the most expensive. Unless you have a swimming pool full of cash, you’ll need to take out a mortgage to help finance the purchase of a home.

Applying for a mortgage can be nerve-wracking, especially if you’re doing it for the first time. The good news is that you can set yourself up for success by following these seven steps.

1. Check Your Credit Reports

Before you get too deep into the mortgage application process, it’s a good idea to take a step back and check your credit reports first. The health of your credit will play a big part in getting a good deal on a home loan, or even getting approved at all.

Start by pulling your credit reports from each of the three major credit bureaus: Experian, Equifax and TransUnion. The easiest way to do this is by visiting annualcreditreport.com, the only website that’s authorized by federal law to provide free credit reports once per year.

Next, review your reports to ensure there are no errors or accounts that aren’t yours listed that may have damaged your credit. For example, review your personal information such as name, address and Social Security number for accuracy. Also check that the credit accounts and loans listed on your reports have been reported properly, including the balance and status. Double-check that there are no mysterious accounts opened, which would signal possible identity theft.

If you find an error, you can dispute it with the bureau that’s reporting the incorrect information by visiting its website. Once you submit a dispute, the bureau is required to investigate and respond within 30 days.

You should also look out for negative items on your report that are correct but can harm your credit score. These include delinquent payments, accounts in collections, bankruptcy, liens and too many credit inquiries. Though you can’t dispute factual entries, you can work on remedying them before applying for your mortgage.