Getting a mortgage can be an intimidating process, especially if it’s your first time buying a house. Preparation, however, can alleviate your anxieties. Here are some important details to note as you get ready to take on the challenge of committing to a mortgage.
How’s Your Credit Score?
First things first, make sure you have a healthy credit score. This is an essential part of your mortgage application as high credit scores get lower mortgage rates. Even a rate of 1% can make future payments easier and save you thousands of dollars in the long run.
After verifying that your credit score is ready for a mortgage application, ask your bank for your updated and accurate credit report. Lenders typically look for borrowers with a history of on-time payments and intelligent credit utilization. For example, Econ Mortgage says some lenders don’t raise their margin rates when they see that a borrower can be trusted.
Have You Seen the Hidden Costs?
Usually, the price that you get up front isn’t all that you need to pay for. There are always hidden fees in the home buying process like the commission fee for the realtor, the down payment, insurance fees, et cetera. If you are uncertain as to how much you can really afford, consider the 30/30 rule. This rule lets you budget your income accordingly and prepare for the long-term commitment of a mortgage in advance so the fees won’t take you by surprise.
When applying for a mortgage to buy your first home, it is important to keep a level head. Intelligent decisions can positively affect your financial bliss for years to come, after all.