Applying for your first mortgage? It may be exciting, but not qualifying for your home loan can put a damper on the celebration. Consider planning ahead by getting your finances in order before you apply for a mortgage loan. This will give you the upper hand when seeking a mortgage provider. If well prepared, you will have a better chance of qualifying. Here is what you should work on.
Gross Monthly Income
Financial institutions will review the amount you are allotted before taxes. You will need proof of income from all applicants. How much you can afford is based on the net income of all applicants, with allocations for debt repayment and living expenses. You will be approved for less if you owe money to other financial institutions, but a larger amount may be approved if you have less debt.
Your credit score will let a mortgage loan officiator know your repaying habits. With good credit, you are less likely to run into problems with your first home loan mortgage. Conversely, a creditor will find issue with black marks on your credit so try to be on time for six months before applying.
It is important how long you have worked in the same line of work or an entry level position that coincides with your education, so mortgages providers or lenders can see consistency in your habits. Remember, if you have been bouncing from one job to another it will appear as a blemish to a lender. However, if you have simply been changing positions within your industry, this principal doesn’t apply.
Begin putting money away for your down payment now. A larger down payment reassures lenders that you have the discipline to be responsible for your mortgage.
Get the Best Deal
Outline what you need, and narrow down the list of home loans you will apply for. There are many types of loans, FHA and VA Loans that may help with your rates. Explore your options and find what is right for you.