Top Mortgage Tips for First-Time Home Buyers
Arranging a mortgage certainly is a big commitment. It’s therefore important that you find the best deal possible if you are a first time home buyer. In order to get approval and qualify for a good rate, you’ll need to be in great financial shape. This means that you must be aware of certain things before you can arrange for the mortgage. Below are a few tips to help you get the best possible deal:
Plan your finances
It’s important to take a bit of time to plan your finances before applying for the mortgage. To begin with, consider whether you’ll be able to afford paying back the amount you’re borrowing.To begin with consider whether you’re going to afford to pay back the amount you want to borrow. Secondly, you’ll need to make sure that the money you’re borrowing will be enough to buy the property, with some more left to take care of associated fees. Do you expect to have any problems with the monthly repayments. You’ll need a mortgage calculator to work out the numbers so you can be adequately prepared before approaching a lender.
Study: My Understanding of Homes
Fix your credit
The 9 Most Unanswered Questions about Lenders
Two of the biggest factors your lender will consider when determining how much of a risk you are are your credit history and credit score. You should therefore have a look at your credit report before applying for the mortgage. The last thing your lender wants to see is credit cards with high balances. So make sure you’ve paid of your debts, or at least tried to keep the balances low. It’s also helps if you don’t have any outstanding loans, such as financing a new car, at the time of your application. Having good credit is a demonstration to the lender of your ability to manage your finances well, and that increases your chances of getting approval.
This certainly is one of the topmost considerations. While a 15-year loan may come at a lower interest rate, the monthly payments will be higher than if the repayment period was stretched over another 15 years. Taking a shorter-term mortgage would be a good idea if you can afford the large monthly payments.
Having a stable job matters
Having a stable job helps, as most lenders want to see that you’ve been in a certain job for a bit of time. So if you’re thinking about changing jobs, you may want to secure the mortgage first before you proceed. Most lenders will only consider applicants who’ve been in their current jobs for a minimum of 3 – 6 months. Remember that one of the things they’ll need is proof of income. This means obtaining the relevant documents from your employer. You might also be asked to provide your last three months’ pay slips and bank statements so the lender can have a look at how you’re earning and spending money.