Posted onApril 09/2018
A first time home buyer might be confused or nervous about getting a mortgage. They might not know exactly what it takes to obtain mortgages and they might not know what lender is the best for home buyers. The good thing is that there are some things that you can do in order to be more ready for the entire process! These things are discussed below.
Check Your Credit Score
The first thing you want to do before applying for a mortgage is check your credit score. Since many lenders require you to have a minimum score, knowing yours will result in going into the situation more prepared. You don't want to have a credit score of 600 for a lender that requires 700 and higher. Not only is this embarrassing, but they might not appreciate the waste of time!
Look at Assets and Liabilities
The next thing you want to do is look at everything you owe and how you spend your extra money. For starters, you don't want to add another bill if you're already drowning in debt. If your debts aren't an issue, then you want to make sure you can cut back on certain spending so you can ensure you'll be able to make your mortgage payments. Going into the situation already knowing what your financial status looks like will save you grief in the long run.
Compile Important Papers
In order for you to apply for a mortgage, every lender is going to want copies of important documents. While these differ from place to place, some of the documents you'll definitely need are pay stubs, tax statements, W-2s, and bank statements. Keep in mind, they want every single page included with each of these things, so you want to ensure that you have everything. They might also want information from past employers and current bills you pay, so make sure you keep everything!
Calculate How Much You Can Afford
Calculating how much you can afford before applying for a mortgage will help ensure that you can easily make your payments every month. You don't want to go in not knowing how much you can afford then get stuck with a huge payment. Not only can this ruin your credit, but you can also end up losing your house. Knowing your number will help you look at houses in that range and get a mortgage that won't break the bank.
Figure Out Down Payment
The final thing you want to do is look at everything and figure out how much you can put as a down payment. Keep in mind, most lenders will require a certain amount but if you can do more, then your payment will be lower. This might also make it so that you get a better rate. With that being said, if you can't afford the minimum payment, ask about tacking on a little more to the first payments you do to make up for it.
To learn more, call Northwood Mortgage today at 416-969-8130 or contact us here.