What’s the first step in getting a home loan? It has absolutely nothing to do with contacting a mortgage company. In fact, it’s all about that credit report and score of yours. Without a good looking credit report and score, you’re not going to like the loan terms and conditions that are provided to you. Before you even start looking at which companies to apply with, think about taking the time to doctor your credit.
It takes time to improve your credit report and score. It takes time to prepare for a mortgage, too, so the earlier you get started, the better. You’re also going to have to save up a down payment. Have you done that yet? If you have already done that, then you can skip to the next section. You need a solid down payment to get a home loan and to save yourself some money on interest of the life of the mortgage.
There are financial documents you’re going to need when applying with mortgage lenders as well. Therefore, it’s time to start getting organized. The better prepared you are, the easier time you’re going to have during the application process. Bank statements are an example of what you’re going to need to submit for documentation.
Have you determined how much of a mortgage you can afford? Factoring in the down payment, your income and the interest rate your credit will get you, how much house can you afford? One way you can make this math a little easier on you is to use a mortgage calculator. Just like with rent, the mortgage payment shouldn’t be any more than 30 percent of your income.
Are you also going to use a mortgage rate comparison site? You might want to at least do some research into which companies are offering the better rates. A mortgage is a big investment, however, so it’s not just about the rate. Naturally, mortgages also get sold by larger companies sometimes after being carried for the first year or so. Still, you want to know the reputation of a mortgage company along with the rate that they are going to offer you.
You can track those interest rates as you make your way through this process. Remember, you are going to be working on your credit, and you’re going to be saving a down payment. In this market, you are only going to see the low interest rates start rising. Don’t allow that to make you get in a hurry. You want to be sure that you are taking your time during this process.
When it’s time to apply for a mortgage, you want to get pre-qualified. That is a process you might want to consider prior to actually finding a property. You want to know how much home the companies themselves say you can afford. You want to be prepared to buy a home when you find the right property. Are you going to be able to finish the deal when the time comes?