For most of us, buying a home is not possible without the help of a mortgage. Although some people are able to qualify for a mortgage immediately, others will need to prepare before they apply. When preparing for a mortgage, follow the tips below for the best results.
Know how much you plan to borrow.
One of the best ways to begin preparing for a mortgage is to figure out how much you will need to borrow. To do this, research home prices in your area to get an idea of how much you will need to spend.
Save for your down payment.
The next step in preparing for your mortgage is to begin saving for your down payment. The minimum down payment you will need depends on the amount you plan to borrow, as well as your lender’s requirements. In general, most loan programs require a down payment of at least 20 percent of the home’s purchase price. However, some loan programs may allow lower minimum down payment amounts.
Check your credit.
Your credit score will determine your ability to qualify for a mortgage, as well as the interest rate the lender offers. Check your credit well in advance of applying for a loan so that you can resolve any problems before the lender views your credit report. If you notice any inaccuracies on your report, you can typically have them removed by filing a dispute with the credit reporting agency. If you find that your score is lower than expected, take steps to raise it before you try to apply for a mortgage.
Talk to a lender.
Even if you aren’t ready to begin the application process immediately, it’s still a good idea to talk to a lender once you know you will be applying in the near future. During this conversation, be sure to ask about your mortgage options, as well as any recommendations the lender may have to help you prepare.
For more information about preparing for a mortgage, contact us at Starboard Financial today. We have loan officers conveniently located nationwide.