Buying your first home is an incredibly exciting event, and it is probably something that you have dreamed about for a long time. Unless you are independently wealthy or have been saving for many years, there is a good chance that you will need to take out a mortgage in order to buy your house. If you are a first time buyer, use the following tips to ensure that you are prepared to tackle the home buying process:
Take a Look at Your Credit Reports
The information contained in your credit report will make a huge impact on whether you are approved for a mortgage, as well as what interest rate you will be offered. Before even talking to a lender about a mortgage, access your credit reports to find out your credit scores and review the information listed. It is not uncommon for there to be errors on a credit report; if you discover any errors contact the credit reporting agency immediately to have the issue fixed.
Pay Down Debts
Lenders get nervous about lending large amounts of money to people who are carrying a lot of debt. As you get ready to start the home buying process, pay off as much of your debt as you can. The lower your debts, the more attractive you will be to mortgage lenders. If you plan on buying a home soon, it is also a good idea to refrain from other big purchases, such as financing a car, or racking up large credit card bills.
Know How much You Can Really Afford
The mortgage amount that you are approved for may not actually be what you can realistically afford. Take the time to list all of your monthly financial obligations and bills so you have a clear idea of how much money is going out of your account each month. This will help you determine a mortgage amount that you can realistically afford to pay without being house poor.
Get Pre-Approved Before Viewing Homes
If you need a mortgage to buy a home, start the application process before you even begin looking at potential homes. The real estate market is constantly changing, so you want to be prepared to make an offer when you find a house that you love. Being pre-approved for a mortgage will ensure that you have financing in place and also have a clear idea of what price point you can afford when searching for your home.
For more information, contact a mortgage company like CU Mortgage Service.
Share5 June 2015
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