Do you know what to do for your very first time as a home buyer?
After thinking about it for a long period of time and debating if it’s better to buy or rent a home, you’ve decided that it’s time to apply for a mortgage. You’re ready to move out and get your place. You have a job close by, you plan on staying in the area for a long time, and you’re ready too settle down. You believe that buying a home is the right move for you right now.
What’s next? What do you have to worry about when looking in your first home mortgage? That’s exactly what I’m going to outline for you today.
What do you need to know before you apply for your first mortgage?
Your credit score must be where you want it to be.
Have you closed any accounts recently? Have you been late on any payments? Have you just not built enough of a credit history?
The truth is that you need to fix your credit score before you apply for a mortgage if you want to get approved at a decent rate. If you’ve been reading this site then you know how important a good credit score number is. All I’m going to say here is that it’s okay to few a few months or even a year until you improve your credit score. There’s no sense in rushing into a home purchase where you’re stuck with a high interest rate due to your lame credit score.
You should have money saved up.
Not only should you obviously have money saved up for the down payment, but you should have some extra savings. The lender doesn’t want you blowing all of your money on just the down payment. They want to know that you have some extra savings just in case.
What if you lose your job? What if you get sick? The lender wants to know that you have savings to protect yourself and so that they’ll get their money back that they loaned you. This is why it’s important that you run all of the costs associated with buying a home.
What are some of these home ownership costs?
- New supplies for the house.
- Increased consumption.
- Property taxes.
- Closing fees.
- And so on…
You should be able to prove your income.
Any reputable lender will be hesitant to loan you any money if you can’t prove your income and that you actually have money coming in. I’ve heard stories from readers where they had to prove two year’s worth of income. I’m not sure that it’s always going to be this extreme, but you should be prepared to prove you have money coming in.
This is critical because the lender wants to know that you actually make money to cover your mortgage payments. How will you make your payments if you can’t prove that you have a steady income?
Are you ready to apply for that home mortgage loan? Do you have everything in order?