Getting a mortgage is a very big deal. It is probably one of the most major financial decisions that you will ever make, if not the most major. The process can be nerve wracking and time consuming, but there are a few things that you can do to make it a little easier on yourself. The following tips are for you to use before and during the process of applying for a mortgage.
If you think that you can just go out and apply for a mortgage and get it, you may be incorrect. Applying for and securing a good mortgage takes time. In this era of “I want it now”, many people do not like to hear that there are things that they should do well in advance of applying for a mortgage. If you can, establish a solid work history with one employer. While this is sometimes beyond your control because keeping a job is a two way street, you can resist the urge to job hop. Also, make sure that you know your credit score and that you take prompt action to correct any mistakes that are on there. Credit reports can contain errors, and you want to make sure that you put your best foot forward at this very important time. Also, try to season some of your assets. Lenders look back at your bank accounts and see what your balance has been over time and they won’t be fooled if you have a lot of money now but had virtually nothing in the bank for months prior.
When you are involved in the application process, steer clear of making these common mortgage mistakes. Make sure that you take the total monthly payment into account and do not apply for more than you can afford. Insurance and property taxes are a fact of life, and they can eat up a sizeable chunk of what the banks say that you will be able to pay for a house each month. Make sure that your lender locks in your rate, and that they send confirmation of the locked rate in writing. Rates can change more than once a day, and you want to be sure you get the best rate you can. Above all, read, reread, and even read through the final loan paperwork with someone else. You must spend some time getting your head around exactly what you are signing in order to avoid signing something that is not what you need.
Photo by taliesin on morguefile.com.