Buying a house is one of the biggest financial decisions that you can ever make, and therefore you need to make an informed choice. This is critical, especially if you will get your house on mortgage terms. There are several steps that you need to follow before you can begin the process.
- Start by Checking Your Credit Score
Before you can start a mortgage application, the first thing that you need to do is to check your credit score. A higher credit score plays a significant role in your mortgage approval process. Before any lender can approve a mortgage, the first thing that they do is to check the creditworthiness of an individual. Ensure that your credit score is accurate to increase your chances of approval.
- Larger Down Payment
When you make a large down payment for your mortgage, you get better terms. Putting more money as a down payment ensures that you pay less every month. This simply means that if your down payment is high, you do not require as much money from your lender. In addition, the lender considers you as a lower-risk borrower.
- Steady Source of Income
Besides the lenders accessing your credit history and the ability to make a down payment, they also review the employment history. This is to ensure that you have a steady source of income every month and that you can service your loan. Therefore, it is best to avoid switching careers or changing jobs when you are activity looking to buy.
- Check Pre-Payment Penalties
You need to check with your lender if you will incur penalties for early loan repayment. Some homeowners, once they experience a cash windfall, may decide to double up their payment, clear the loan sooner and end their term. Check to make sure that if you decide to do the same, you will not incur any pre-payment penalties.
Homeownership is a dream come true for most people. However, sometimes a mortgage is the only option to getting your dream home. The terms of getting a mortgage can sometimes be complex. Therefore, it’s advisable to speak to mortgage professionals at American Mortgage Resource Inc. We can advise you on refinancing your mortgage, buying a new home, and cashing out on your home equity, as well as assist you to apply, qualify, and get approved for a new loan.