What parts of my finances does a mortgage lender review?
A lender will check your credit score and history, your debt-to-income ratio, which is a measurement of the amount of debt you have compared to your income, and take a general look at how much money you have in checking and savings accounts in order to be confident you’ll be able to pay for your mortgage, taxes, and other costs associated with buying a home.
Credit scores range from a low of 300 to a high of 850. While there’s no magic credit score that will guarantee you will be approved for a mortgage, generally speaking, the higher your credit score, the more borrowing options you may have.
There are several ways to reduce debt, including decreasing your spending on non-essential items. Another option is to put money that you may not have already budgeted for, such as a tax refund, toward larger payments on your debt.