Pay on Time and Your Credit History Will Help You Get a Better Mortgage

Gone are the days when the banks didn’t mind too much if you made a payment a few days late, perhaps just once or twice over a couple of years. They would have accepted your explanations and there probably wouldn’t be any consequences.

Credit Card

Nowadays, just making one payment slightly late might hurt your ability to qualify for home loans or a great interest rate. You can’t afford to be late with any payments because it could put your home ownership plans in trouble and it will definitely hurt your credibility.

Matching Pay Day with Bill Payments Going Out

Many people live with a poor monthly financial cash flow situation that you have to get past to create and maintain an excellent financial payments history.

If you find that you’re always scrambling to make payments on time, you’ll find that you’re paying too much interest, too many late payment charges, and if you look at your credit report you’ll see that your score will be suffering in a big way.

Do your best to remedy this problem as soon as possible and it will save you time, money, and frustration. This may mean overhauling your budget and living extra lean for a while to get a surplus available to offset your current budget issues. You’ll save money on service charges with your bank, too, such as overdraft interest and fees for insufficient funds.

When you have sufficient money in your bank account to pay your bills, those companies that you owe money to will record you as an excellent bill payer and this will help you going forward, particularly if you are looking to get a mortgage or qualify for a pre-approval at a great rate.

Organising Your Payment Dates

Although most home loans, credit card companies and other personal debt companies will tell you that they cannot change the payment due dates, with a little insistence you can get some of them to change the payment dates so that your bank accounts are full with your cleared monthly pay before your mortgage and other payments are taken from your account. You may even opt to pay early on several accounts so that you don’t have too many payments due around the date of your mortgage payment withdrawals.  Some people find that bi-weekly or even weekly mortgage payments are easier to budget for than a larger monthly payment and of course this accelerated schedule will save you on interest and have you mortgage-free sooner, too.

Don’t forget to periodically check your credit report (there are even some subscription services that will send you automated updates) so you can be sure that everything is on the right track and that there are no errors. Whether getting ready for your first home loan or talking about a renewal or refinancing scenario, it’s best to sit down with a bank or mortgage broker with a full understanding of whether or not you look great on paper.