So you're looking into getting a home, searching and you're about ready to buy. You don't want to miss anything, or maybe you have never gone through the process. Believe us it can be very stressful, but keep these essential tips in mind.
1. Know your credit score upfront
It literally takes a few minutes to pull your credit report and order your credit score. But surprisingly, some future home buyers never review their scores and credit history before submitting a home loan application, assuming that their scores are high enough to qualify
2. Save – Bank Statements Matter (up to 6 months before)
If you're getting a mortgage loan like most buyers you will need an employment history of at least 2 years – not to mention most lenders will look closely at last 6 months of payment activity. Make sure you save money and keep a good balance to show you are capable of affording the home and downpayment.
3. Don't switch jobs – Very important
I know someone who quit working 9 days before closing on their loan – lets just say they were not able to get the home. They should have just waited until after the loan closed. Its very important to keep your current job throughout the entire mortgage process.
4. Pay Down Debt and Avoid New Debt
You don’t need a zero balance on your credit cards to qualify for a mortgage loan. However, the less you owe your creditors, the better. Your debts determine if you can get a mortgage, as well as how much you can acquire from a lender.
5. Get Pre-Approved & Pre-Qualified
Don't find the perfect home and watch it get snatched from underneath you – You want to be pre-approved and prequalified.
Talk to a lender first
Never max out your budget – even if you're approved for lets say $300k you should use the rule of 70. Only take 70% of what you were approved for.