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Filling out a mortgage application for the first time can be a little intimidating. You really do not know what to expect and whether or not you will be approved. If you have been a renter your whole life, a first home purchase is an exciting time. The approval process depends on a lot of variables in your past history, though. One of the biggest variables is your past rental history. Many people think that approval is based strictly on your credit score and your income, but rental history plays a big role as well. Here are a few things to consider when factoring in your rental history and getting approved for a mortgage.
One thing that a mortgage officer is looking for when they review your history is consistency. They want to see that you have been a consistently reliable renter throughout. They want to see that you have made your payments on time every month for however many years you have been renting. While one or two late payments might not be a deal breaker, if you often made late rent payments, it could be. You need to display that you can be counted with regular mortgage payments. If you have been responsible in the past, they will feel better about giving you thousands of dollars for a mortgage.
Another thing that a mortgage lender will want to look at is your history with eviction. If you have ever been evicted from a rental unit, they will want to know all about it. They will want to know what happened and if it was related to your payment history or some other issue. They will most likely want to speak with your former landlord if at all possible and find out what went on. If your credit and income are already not that good, an eviction will most likely be a deal-breaker. Being evicted years ago might not be enough to keep you out of a mortgage, but if it was recent it probably will be.
In order to get this information, they will examine your credit report. Looking at your credit score helps to paint a picture of what type of a borrower you are. A big part of the credit score is made up of your payment history. If you have always made your payment on time, your score will most likely be good. If you make a habit of missing payments or making late payments, it can negatively affect your score. One of the biggest factors in making a lending decision is whether or not you have a good credit score. Therefore, you need to do everything that you can in order to maintain that score throughout your borrowing history. A strong rental history can go a long way toward this and helping you get a mortgage.
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