It is time to buy your first home! Making this purchase is such an overwhelming process, and we want to make it as easy for you as possible. The best way to do that is to be ahead of the game. Before you jump into a new mortgage, learn how to prepare to get the best outcome.
- Check your credit
When you apply for a mortgage loan, your credit is the first thing that is checked. You should monitor your credit score and look out for anything that may be affecting it. Make sure your credit report is accurate and that no one else has access to your credit. Your ultimate goal is to prove you have the credit it takes to get the best rate for your loan.
- Correct any errors
If you come across some errors once you view your credit report, dispute them. These could range from accounts you never opened to addresses that vary from your own, etc.
This will be one of, if not the, largest buying decisions you will make. You must gather as much information and research different loan options, rates, and brokers before making your final decision. Researching could provide you with the chance to get a better rate.
- The Bigger the Down Payment, the Better
It would be best to be realistic about what you can afford to put down on a new house. When setting your budget, make sure you remember that the more you put down, the better your mortgage terms will be. If your mortgage is lower, you will have more money to put into any necessary repairs and maintenance.
- Prepayment Penalties
Some types of mortgages come with prepayment penalties. Do not commit without looking into what type of penalties come with the mortgage loan you are selecting.
- Apply for multiple loans in a short span of time
Each time you apply for a loan, it dings your credit report. Applying to different longs over a month or longer could damage your credit score. That can then affect the rate you get on your mortgage. If you apply for a couple of loans over a two-week period, that is only one inquiry on your report, not multiple.