When it comes time to buy your first home or move into another that better fits your needs, getting a mortgage loan is a key part of the process. However, there are certain steps you'll need to take beforehand to secure such financial assistance.
Regardless of what type of mortgage loan you’re interested in, it’s important to keep these tips in mind so you'll be prepared for any unforeseen obstacles along the way. Following these suggestions could help avoid certain challenges, such as falling in love with a home that ends up being out of your budget, or losing out on a property because you did not get pre-approved in time.
1. Determine What Your Budget Should Be
You shouldn’t look at any homes on the market that are above your price point—it’s not worth wasting your time when you know you won’t be able to afford it. As a result, one of the first things you should do before searching for a home is to figure out what exactly you can afford. This involves factoring in a property’s purchase price, as well as upkeep and homeowner’s insurance once it is officially yours.
2. Mind Your Credit
Your credit score plays a role in whether or not you'll be approved for a mortgage loan. Consequently, it is in your best interest to keep your credit at a healthy number, while also looking for ways to improve it.
3. Save, Save, Save
Saving money is an essential part of buying a home. Even after you set a budget and know what you can afford without becoming so-called “house poor,” you should still save as much as you can. So, it is probably best to hold off on making any big or unnecessary purchases, such as furniture, until after you close on your new home.
4. Hire A Realtor
With so many property-listing sites, such as Zillow and Trulia, you may be tempted to look for a home by yourself. While these resources are helpful, trying to go through the entire home-buying process without a real estate specialist will likely add unnecessary stress and result in substantial confusion. Realtors understand this process, and can inform and support you, every step of the way. Furthermore, they know what the homes are worth in specific neighborhoods, and can show you those available that best fit your wish list, as well as assume price negotiation responsibilities.
5. Apply For A Loan
Applying for any type of mortgage loan requires specific documentation that must be shared with your lender. This includes, but is not limited to:
- Credit report
- Recent bank statements and W2s
- Last two pay stubs
- Outstanding debt
Make sure you are prepared to provide this information, so you can get a mortgage loan as quickly as possible.
6. Prepare For Closing
The closing solidifies your purchase, so don’t forget to be ready to go to the closing table after an offer is accepted. Luckily, if you hire a realtor, as previously suggested, you will know exactly who’s who at the closing table.
Buying a home is exciting, but can also be stressful, especially if you don’t know what to expect, or aren’t prepared. This is why it's helpful to consider the above tips as you begin this process. Feel free to contact Contour Mortgage if you have any questions!