Do you think you are ready for a mortgage? It can be a big step that requires planning and being prepared. A mortgage is one of the biggest financial decisions you will ever make. Here are 7 things to consider before you go begin your mortgage application: 1. Know your Credit Score Your credit score will affect your qualification for a mortgage. Before considering to buy a house, check your credit report and score to make sure there are no surprises that you may not know about. In general, you will have good credit when you have no late payments, collections and no high balances. 2. Consider Maintenance Costs It's important to consider the cost of maintaining a home before you buy a home. The mortgage is only one cost of owning a home. Consider your income and evaluate if you would have the money if the roof leaked or the heater were to wear out. Does your monthly budget include enough to save for maintenance. 3. Your Job Security and Stability Before applying for a loan, evaluate your long term job stability. Will your job last? How will you handle changes? Thinking a bit into the future is part of planning for a mortgage. Check your emergency funds and savings, if your situation changes, will you still be able to afford your home. | 4. Gather the Paperwork Applications require a specific amount of paperwork from you. Lenders can ask for tax statements, bank accounts, check stubs..etc. Be ready to supply the information in a timely manner to help the process go smoothly. (see our paperwork checklist) 5. Consider Hidden Expenses Home ownership comes with multiple expenses that go beyond appraisal fees, property taxes, closing costs and insurance. One of the hidden costs to a home is more bills! If you are used to renting you may not pay things like water/sewer and trash. Be ready to evaluate all the costs that are associated with ownership. 6. Build An Emergency Fund Emergencies happen!! From flooded toilets to broken appliances, are you ready for unplanned expenses? Having emergency funds aside are better than using a credit line. 7. Be Aware of Other Credit Applications Lenders will be checking your credit lines. Applying for any other type of credit line during your application process can hurt your chance for a mortgage. When getting ready to apply, do not apply for any other type of loan. Before you buy a home, consider how your current financial situation will be affected and plan for any emergency. |
If you should have any questions, contact our office at 619-Low-Rate