WARREN, Ohio (WKBN) – Buying a new house or car is exciting but waiting for that credit check can be stressful. It’s a really important part of the process — that number will determine your rate.
“Rates are based on many things — your credit score, the year and model of car, your term, loan-to-value,” said Vickie Paisley, consumer lending manager at 7 17 Credit Union. “So there are a lot of pieces that go into determining an interest rate.”
She said it’s so important to know your credit score.
“One good source is AnnualCreditReport.com. Members or anyone can get a free credit report once a year from each of the three main bureaus. They can review their credit report.”
In today’s economy, the lending process has been streamlined with online applications but you still need to have certain personal information accurate and available.
Aaron Frank, a mortgage originator with 7 17 Credit Union, said you’ll want to make sure you have some paperwork ready to go.
“Ideally, we would want to collect their last two years of W-2, last two years of tax returns, two pay stubs and two bank statements and from there, we pretty much have the entire package of information. We would need to load an application, pull a credit report and let them know what they were approved for.”
In the competitive Valley housing market, knowing what you are preapproved for can make a huge difference.
“The preapproval is important from the buyer’s standpoint in that it lets them know, ‘Do I need to be looking at $80,000 homes or $140,000 homes? What can I truly afford?’ Then, ‘How much does it cost to get into the house? What do I need for a down payment? What do I need for closing costs?'” Frank said.
Both experts recommended shopping rates and researching any big purchases.
For information on financial education classes and tools to help you manage your money, visit 7 17 Credit Union’s website.