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Make sure you pay more than the minimum payment

We all have bills to take care of.  Whether it’s credit card bills or school loans – or possibly both – we all have to pay them.

But, how much are you paying per month?  Is it only the minimum or are you paying a little more each month?  Better yet, if you are paying the entire bill, that’s even better.

Making more than the minimum payment will help you chances at getting a home loan
Making the minimum payment will hurt your chances at getting a home loan

Home loan lenders are cracking down on who they give their money to.  Not only are they looking at if your bills are paid on time.  They are also looking at how much of the balance you pay per month.

If you are paying off your credit cards, you will be all set and have a better chance of getting a better loan.  However, if you are only paying the minimum, you might run into a problem.

Lenders such as Fannie Mae and others want to make sure that you can pay off your loan.  If you have credit card debt, and you are only making the minimum payment each month, they will look at your situation negatively.

Why?  Because they will look at your paying the minimum payment and wonder if you’ll do the same thing with them.  That will lead them to wonder how much you can afford to pay.  Minimum payments also affect your credit score.  As a result, they will be skeptical about giving you a big loan because they will wonder if you will pay it back.

Make your payments wisely.  Don’t give the lenders any reason to wonder about you.  Pay your current debt off.  If you can’t pay it off in one shot, talk to the credit card companies and see what you can do.  Making the minimum payment will cause everything to drag on, and you could be considered a risk when applying for that home loan.

The Powell Group at Keller Williams of the Western Upstate of South Carolina encourages you to do what you can to pay off your debt.  Doing so will let the lenders know that you are doing what you can, which will make them more willing to work with you.

If you are moving to the Western Upstate of South Carolina, log on to our website and view all of our available homes.  We are sure you will find exactly what you are looking for.

(Picture used from Wikipedia)

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