Give yourself a money makeover

Assessing assets worth the effort

By Leslie T. Snadowsky

If your balance sheet makes you feel unbalanced, invest in getting your finances in order. Create a budget, set up an emergency fund and find ways to reduce your monthly bills and student loans. Marielena DiMatteo, a mortgage advisor with Finance of America Mortgage in Bluffton, has five additional tips to fortify wealth, maximize resources and capitalize on credit.

Credit cards

When trying to get a mortgage, be mindful of how you use credit cards because buying a big-ticket item could shut the door on home ownership dreams. “The best suggestion we make is to keep your credit card balance below 30 percent of your credit limit,” says DiMatteo. “And never close credit card accounts. That hits credit scores pretty hard because it reflects negative activity. People can pay credit card balances off completely, but they should never close their accounts.”

Credit history

DiMatteo suggests using free online tools to access credit scores and reports and to correct any issues before seeking a mortgage. “Creditkarma.com gives you your credit score for free, and you can get a free credit report every year from annualcreditreport.com,” says DiMatteo.
“What we see a lot in the mortgage business are clients not knowing if there are any problems with their credit reports. When they start to investigate and contact the three credit bureaus, Equifax, Experian and TransUnion, to challenge what’s on their reports, they can slow the mortgage process down.”

Insurance

It’s easy to get overinsured and overcharged, so to save some money reevaluate your insurance policies with the help of a professional. “What we suggest is using brokers,” says DiMatteo. “Customers don’t pay brokers. The insurance companies pay the brokers. So you can call an insurance broker and say find me the best rate for my insurance, and make sure I have the proper coverage. Consulting with professionals is really important because they can shop around for you.”

Financial documents 

“When we start a file for a mortgage customer, we need a lot of documents,” says DiMatteo. “We need pay stubs, tax returns, bank statements, proof of assets and other important information. Oftentimes people throw away their pay stubs, they don’t know where their tax returns are, and their bank statements are incomplete. That’s going to slow down your loan process, and that’s any loan, not just your mortgage.”

DiMatteo suggests storing financial documents together in a safe place that’s easy to access, and keeping digital files is preferable because they’re easier to email to a mortgage professional.

Budget

How you live your life and pay for it comes under scrutiny when applying for a loan. Eliminating unnecessary spending, including canceling subscriptions and limiting trips to your favorite restaurants, can make your financial profile leaner and more attractive.

Marielena DiMatteo says paying off one additional mortgage payment each year will take more than four years off the life of your loan and save you thousands of dollars in interest.

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