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 best terms, that fits 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 review and briefly consider the 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. Check and fully 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 articles and report, just as 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’ll probably be somewhat safe. Prepare 3 months or more before starting 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 earlier, that’s even better! Look at the report and consider, if you were the lender, would you consider it a good risk?
two. Repair: One of the main reasons to start Step One, as far in advance as possible, is to give you the opportunity to make any necessary repairs and improve your credit score as much as possible. Be careful to avoid applying for or taking out new credit during this period, as doing so could damage 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 made your repairs and/or corrections, and/or paid, until the best position. yourself.
Four. Stay away from any offers of credit, etc., during this period: That offer you get at a retail store, which will immediately give you an additional 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, in an account, you can clearly 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!