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Applying for a mortgage to buy the house of your dreams can be a daunting process. You have to submit an application, paystubs, tax returns and other documentation. In addition, the lender will base their decision and how much money to loan you partially on your credit score.

Reasons to Check Your Credit

Before you apply for a mortgage, its a good idea to know where your credit currently stands. The best way to find out is to request copies of your credit reports. You’re entitled to receive free copies of your reports from the three credit reporting agencies: Equifax, Experian and TransUnion.

One reason? You can compare your score to your lenders guidelines to see if you’d have a good shot at being approved for a mortgage. If your score is too low, you can take steps to raise it. You can pay down your credit card balances, consolidate debt to lower your interest rates and pay it off faster. Additionally, be sure to pay all of your bills on time. It may take several months to have an impact, so the sooner you start making changes, the better.

You should also check your credit before applying for a mortgage to find out if your reports contain any errors. Sometimes records get mixed up if people have the same name or a company reports information incorrectly. If you find an error on your report, it could also be due to identify theft. Data breaches happen all the time, and criminals use stolen information to open fraudulent accounts. You might be unaware unless you check your credit report.

Errors on your credit report could prevent you from getting a mortgage for which you actually qualify. If your credit report shows that you have more debt than you really do or that you’re behind on payments when you really arent, that could cause the lender to consider you too risky for a mortgage.

If you find that your credit report contains errors or accounts that you didnt open, you should contact the credit reporting agency to dispute the information. They can investigate to find out what happened and correct errors. If you’ve been a victim of identity theft, contact law enforcement.

Check Your Credit Early

When a lender is deciding whether or not to approve your mortgage application, your credit score is one of the most important pieces of information they’ll consider. Several months before you fill out your mortgage application, request copies of your credit reports. See where your score currently stands and check for errors. Then you can take action to raise your score and correct any mistakes so you can turn your dream of owning a home into a reality.

Published with permission from RISMedia.

Published with permission from RISMedia.

Are you considering having your children share a bedroom? Maybe your current place or new home youre looking at doesnt have a lot of room, or maybe you want to save space for other purposes. Like with most decisions, there are both pros and cons for you to weigh:

Pros

More Space Options: Having kids bunk together could free up space to use as a playroom, office or guest room. If you plan on having another child within the next year or so, you could also turn the extra room into a nursery when the time comes.

Sharing: All parents try to teach their children about sharing, and when kids live in the same room, they are encouraged to not only learn how to share a space, but also how to share each others toys and other items. The experience could also help prepare children to share space when they have roommates at summer camp or later in college.

Bonding: Living in the same room could inspire siblings to spend more time together and become a team. If your children are young, you might walk in to find them reading a book together. If theyre older, they might confide in their sibling or console each other when something bad happens, thus building a stronger bond.

Sleep: Young children tend to sleep better and feel more secure knowing theres a sibling next to them in the room, especially if one of your kids is afraid of the dark. This could mean fewer late nights getting up to check closets for the Boogeyman or sleeping in a crowded bed with your child. Also, older children might go to bed”or at least quiet down”quicker if their sibling is an early sleeper.

Cons

Sickness: Its difficult enough to keep everyone in the family from catching a members cold or flu, but it is nearly impossible to prevent siblings who share a room from getting each other sick.

Privacy Issues: Children have little to no privacy when sharing a room, which could lead to frustration and feelings of rejection. Even if siblings enjoy spending time together, that doesnt mean theyll want to include each other when it comes to having playdates or sleepovers with friends. Many older children, especially teenagers, also crave privacy and independence.

Clutter: A messy room is bound to be twice as bad when youve got two kids throwing clothes and other items around. If your home doesnt have a separate playroom, a shared bedroom can get cluttered with toys fast. Furthermore, kids piles of stuff and necessary furniture tend to get bigger as they get older; the room, however, stays the same size.

Fights: Siblings naturally fight from time to time, but living in a confined space together might intensify or spur more arguments, especially if the kids personalities are polar opposites. When sharing a room, children wont have their own rooms to escape to and cool off.

Decision
Some people believe its beneficial for siblings to room together, while some claim it only works when the kids are of the same sex or similar in age. Conversely, others suggest its best to give siblings their own rooms whenever possible.

Ultimately, its up to you to decide whats best for your family and circumstances.

Published with permission from RISMedia.

There are two different types of outdoor spaces youre likely to come across when viewing real estate in the city

Those that are wide open to skyline views and those that are enclosed hideaways.

Heres a detailed look at how these types of spaces differ.

Open Urban Spaces

Whether its a rooftop terrace or a spacious balcony, some luxury homebuyers are drawn to outdoor spaces with far-ranging city views.

Enclosed Urban Spaces

A courtyard or a walled terrace with lush plantings has the power to transport you outside of your urban surroundings.

Go Big With Both

For those who are not willing to make any sacrifices when it comes to luxury living, it is possible to have both.

Published with permission from RISMedia.

Many people dream of owning a home but feel overwhelmed by the idea of saving tens of thousands of dollars for a down payment. In some cases, borrowing money for a down payment can be a smart move, but there are some important caveats to consider.

When Does It Make Sense to Borrow for a Down Payment?
Many lenders require buyers who put down less than 20 percent of a homes purchase price to obtain private mortgage insurance (PMI) to protect the lender if the buyer defaults. PMI can cost hundreds of dollars per month, on top of mortgage payments, and needs to be paid until the homeowner has 20 percent equity. If you put down 20 percent, youll be able to avoid PMI. If loan payments would cost less than PMI, borrowing to make a large down payment might make sense.

Potential Sources of Funds
If you own another property, you might be able to use a home equity loan or a home equity line of credit to finance a down payment. The interest rate would probably be relatively low, but using your current home as collateral to buy a new one would mean you could lose both houses if you were unable to afford all your payments.

Another option is to take a loan from your 401(k). You could get a low interest rate, but you could also lose a substantial amount of potential savings since any money you withdrew would not be able to accumulate compounded interest.

A personal loan could be quick and easy to obtain and could have a much lower interest rate than credit cards, but it would raise your debt-to-income ratio. That could make a lender reluctant to give you a mortgage.

A variety of federal, state and local programs can help homebuyers secure loans with favorable terms, as well as down payment assistance. Since many of those programs require low down payments, you could buy a house, but you would have to pay for PMI since your down payment would be less than 20 percent. Depending on your circumstances, you might or might not be better off borrowing money from another source to put down 20 percent.

Borrowing money from family or friends could help you avoid high interest rates and have a flexible repayment schedule. Before you take a loan from family or friends, make sure you can repay it. Failing to meet your obligations could cause irreparable harm to your personal relationship.

Weigh Your Options
PMI can significantly increase monthly housing costs for years. If you can put down 20 percent and avoid PMI, you may save thousands of dollars in the long run. You might be able to borrow money from several sources, but think carefully about the pros and cons. Discuss your options with a financial planner and your real estate agent.

This article is intended for informational purposes only and should not be construed as professional or legal advice.

Published with permission from RISMedia.