Buying a house is not an ordinary accomplishment. It requires to be aware of the current trends, deals, and future of the property you are showing interest.
We are going to simplify the process of applying for a mortgage. By the end of this article, you will have everything you need to know to apply for a mortgage successfully.
Here are the steps you need to follow in 2020 to acquire a mortgage:
Stack All Documents You Need
- Tax returns
- Pay stubs, W-2s or other proof of income
- Bank statements and additional assets
- Credit History
- Photo ID
- Renting history
Fix Your Expenditure
It would help if you fixed the percentage of your monthly income that you will spend on the mortgage. Most of the lenders you will suggest the 28/36 rule, where 28% of your income will go to the monthly mortgage payments while 36% is the total expenditure on installments – mortgage loan, car loan, and other monthly loan payments.
Understand Your Market
The market you are eyeing will have a crucial role to play in your mortgage application. The type of home you will want to purchase and the state you choose to buy will dictate the down payment and interest rates you will pay for the mortgage.
Ensure a High Credit Score
The likelihood of you getting a loan is dependent mainly on the credit score you have. It will also play a significant role in deciding the rate of interest for the mortgage payment. We highly recommend keeping a high credit score.
Pay Off Your Debts
Make sure you don’t have to spend more than 36% of your income on installments or other monthly payments. Your financial health will improve your chances of getting a better offer.
Avoid Big Purchases
The mortgage company will keep an eye on your finances after you receive the mortgage approval. Do not make any big purchases or take a loan before the lender writes the check.
We have shared the basic steps you need to follow to get your first home loan successfully. We hope this piece of content brought great value to you. Have questions?
We’re ready to help you to find your dream home, plus give you more insight on the current interest rates.
Share this article: