Applying for a mortgage is one of the most stressful things you can do in your adult life. The amount of money it involves, the legalities, and the fact that they’ll know your financial and work past can all compound into many worries.
Here’s how you can apply for a mortgage without the stress!
Ensure Your Credit Is Good
Your credit score is vital when applying for a mortgage. Although most people say you can get a loan with a score of 625: this type of mortgage will probably be at an incredibly high rate. So work to get your credit score above 700, and try to work that interest rate down. If your score is relatively low, try to spend a year building it by paying off debt, creating healthy spending habits, and avoiding spending too much of your credit limit in a month.
Build A Good Savings
Although if you had a savings of hundreds of thousands, you wouldn’t be applying for home loans: having some form of protection can help immensely. Try to set aside at least ten percent of your income for over a year. If you’re buying your first home, you may not need a down payment depending on the grants in your area: but it’s good to show you have a healthy financial lifestyle. If you can’t prove you’re good with finances, you may find it impacts you negatively.
Have Steady Work With A Good Income
You can’t fabricate five years at a company out of mid-air: so it’s important to have to buy a house in mind for a while before you move forward with it. Having a steady work history with a good income will allow for the lenders to see that you take your life seriously and that you’re working at building up to this house and have been for a while. If your work history is spottier, you should try to focus on fixing that before applying. If your income is high enough, many lenders may overlook this.
Look For A Lender You Can Trust
Try to find a lender who you can trust. They don’t have to be your best friend, but you’re putting your financial future in their hands, so make sure they’re someone you don’t mind working with. Try to find reviews on lending that they’ve done in the past and look into what their interest rates usually look like. If you want perks like folding your yearly property taxes into your loan or possibly even folding your down payment into the loan: look for it. This is too large of a financial decision to leave up to whomever you see first.
Put In An Application With Honest Information
When you apply for a lender, be honest! Although lying may make you look better while they’re reading the information: your application is a legal document. Mortgage fraud is an offense that the FBI handles: it’s not worth trying to save five percent on your interest rates. Be honest, and if you get turned down, take the time to improve whatever’s lacking. You deserve a good home; it just might take some extra work.