Whether you’re a prospective homebuyer looking to find a home of your own, or an existing homeowner looking for better terms and/or rates on your mortgage, it’s important to know a little more about the process of getting the best one, in the best terms, that fit your needs, priorities and situation. Since the vast majority of people use a home loan to pay for their home, I felt it might be helpful to review a few things to consider early on. With that in mind, this article will attempt to briefly examine and consider 5 steps you may want to consider taking to ensure that this often tense and stressful process and period becomes a little easier and more successful.
1. Completely check and review your Credit Report: Especially in today’s atmosphere and environment, where there is so much identity theft, it’s smart to start by doing this. First, review the report for accuracy, etc. Then look at the items and report, the same way the lender would. Start by looking at your debt-to-income ratio. The desirable maximum for this changes periodically, but if you keep it around a third (maximum) you’re probably somewhat safe. Prepare about 3 months or more before you start the process and pay off your debt. Don’t wait until the last minute to do it. If you can do this, a year or more in advance, that’s even better! Look at the report and consider, if you were the lender, would you consider it a good risk?
2. Fix: One of the main reasons to start Step One, as far in advance as possible, is to give you the opportunity to make the necessary repairs and improve your credit rating as much as possible. Be careful to avoid applying for or taking out new credit during this period, as doing so could hurt or lower your credit score!
3. Please wait patiently after steps one and two: Optimally, waiting a year will give you the best results, but you should always wait, at least 3 months or more, after you have done your repairs and/or fixes, and/or paid, until the best position. yourself.
4. Stay away from any offers of credit, etc., during this period: That deal you get at a retail store that will immediately give you an extra discount on your purchase is not harmless, but rather could negatively affect your overall credit. Keep your eyes on the target!
5. Be prepared for the down payment: Most lenders will want to know where your down payment and other funds are coming from. At least 3 or more months in advance, put your probable down payment, into an account, clearly can provide statements, proving ownership, etc. Also, keep in mind that most lenders are looking for borrowers, with a significant amount of other assets, etc.
A little preparation, and paying attention to a few relevant details, will usually make the process smoother, easier, and more successful. If you really want and/or need that mortgage, do everything you can to be prepared!
