Securing a mortgage can be hard work, but it’s much easier when you come prepared!
Finding the perfect home is only the first step; locking down financing can take just as much effort! One sure-fire way to make this go smoothly is to come prepared with these time-tested mortgage tips.
- Save Your Cash
The most important thing that lenders are looking for in potential home buyers is their ability to pay, and the best proof of that is a good amount of cash on-hand for a down payment and closing costs. Of course, “have money to spend” may sound like an obvious tip, but most people don’t think about home-buying early enough. Smart first-time home buyers start putting a very small percentage of their pay checks into an interest-bearing account as soon as they start working, and this can add up to a sizable down payment when the time comes. This will get you lower and more affordable mortgage payments, lower interest rates, and a more streamlined mortgage application process. And don’t forget; keep that cash in an account you can readily access, not a retirement fund or an account with penalties for withdrawal!
- Stick with Your Job
We all need to make career moves, and sometimes even take the plunge into full-time self-employment, but timing is everything. Do you know when the absolute worst time is to make a big job change? Right before a mortgage application! Lenders are looking for financial stability and steady employment, two things that tell them you’ll be able to pay back the loan. So, a new job or a new business is sure to make lenders nervous! However, if you’re in stable, long-term employment, you’re much more likely to get approved. Ideally, you should aim to be employed at the same company for at least three to six months before applying.
- Work on That Debt . . .
You know that great feeling you have when you pay down a credit card to a reasonable balance, or, on the best days, down to zero? Just imagine how great it makes you look to a bank deciding whether to approve your mortgage! Much like your income levels, your debt levels are a big factor in deciding the risk of lending you money – owing less means you have that much more room to take on some new responsibility. Think of your outstanding debts as clutter in a room. You have to clear it out before putting in a new sofa, however impatient you might be to refresh the space! Make a realistic plan to reduce expenses and redirect that money to paying down those accounts as fast as possible and then see how long it will take. That end point will be a much better time to apply for a mortgage. Oh, and you might want to look at your actual credit report while you’re at it – many negative points on a credit rating are simply old accounts that were never closed.
- And Don’t Let it Build Back Up!
We’ve all been on that carousel of debt; you focus on paying down one bill but now there’s not enough to pay off others and you rack up more debt to compensate. It happens to the best of us! But be careful to avoid this trap when looking into mortgages, as lenders will re-check your credit before closing. If you’ve done the work to pay down your debts to prepare for your mortgage application, lock away those credit cards and postpone any new purchases – even appliances for the new house!
- Save Time with Pre-Approval
When you submit your financial information to a potential lender ahead of your home search, that’s called pre-approval, and it can save you lots of stress later! During pre-approval, you’ll undergo all the scrutiny the lender needs to determine how much to lend you, and they’ll provide you with that number so you can start the home search with a much better sense of what you can ultimately afford.
- Make Your Own Call on What You Can Afford
A common problem first-time home buyers run into (especially those that are well-prepared!) is a pre-approval amount that’s way too high for them. When you have a decent income, dependable job, low debts, and high amount of cash due to all your diligent saving, lenders will give you a number based only on those factors. They’re not thinking about how you might not want to spend all your money on this house, and that you might have other needs, expenses, hopes, and dreams besides this one. Look over your budget for everything you have planned and figure out what you’re comfortable spending each month, then see how that matches up to your loan amount. If the bank is offering you more, you don’t need to take it!
Do you want to make your home-buying experience go as smoothly as possible? Get in touch so we can help!
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- Nervous about that first mortgage application? We’ve got you covered! Today on my blog I take the most common concerns lenders have and turn them into some sure-fire tips for a speedy mortgage.
- Preparation is everything, especially when it comes to nailing down a mortgage! How do you do it? I’ve got some ideas – Check out my blog for sure-fire tips!
- What were some of the things you did to prepare for your first mortgage application? I have some tips here, and I’d love to hear yours!
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Email Subject Line: Tips for a Smooth Mortgage
Headline: Master Your Mortgage the First Time with These Tips!
Subhead: Securing a mortgage can be hard work, but it’s much easier when you come prepared!
Finding the perfect home is only the first step; locking down financing can take just as much effort! One sure-fire way to make this go smoothly is to come prepared with the time-tested mortgage application tips in my new blog.
- Be ready with cash
- Stick with your job
- Avoid all other purchases
Find out about what lenders are looking for – and how to master your mortgage application – in my new blog post.
Call-To-Action: Check out the full list here. [Link to blog]
Do you want to make your home-buying experience go as smoothly as possible? Get in touch so we can help!
