The approval process on your dream home can seem a bit dreadful. Whether you are in the process of getting pre-qualified for a home loan or waiting on the “You’re Approved” email; the waiting period can seem daunting.
First-time homebuyer should be aware of the necessary steps that come BEFORE applying for a home. Being financially prepared before applying for a home loan can help make your approval period a lot shorter and stress-free. You should gather all relevant information that may be needed during the approval process—paystubs, W-2 forms, tax returns, etc.
A few things to think about before applying for a home loan:
- What is your current financial status?
- Can you afford to move?
- When is your moving date?
- What is your budget?
Some people tend to rust into getting the perfect home and find themselves in a bad financial situation. Finding the right home at the best budget takes time and a lot of research. You should considered taking a few months to a year to become more familiar with the mortgage interest rates. Researching mortgage interest rates will help you know when to apply for a mortgage, understand the average cost of homes in the city in which you would like to live, and understanding your monthly mortgage budget.
There is one MAJOR factor that overweighs everything in the approval process, credit.
Your credit score determines your mortgage interest rates and monthly mortgage payment. If you have a low credit score, give yourself about 6 months to a year to build your credit score. It is best not to apply for any cars, loans, or credit cards; before applying for a home loan.
We are here to help you with the responsible financial management knowledge to promote smart financial habits.
Contact one of your mortgage lending professionals today and let us show you why it’s easier here at Service First.