When you enter the homebuying market and make your offer on the house that fits you, crossing your fingers and wishing for a smooth mortgage process is something all buyers do. But did you know that you can control a lot of elements that ensure a smooth close on a house? Check out these 5 simple tips to follow before owning that home!
On Time…Every Time!
We all have bills to pay, and it’s vital that we pay them before they are due! You need a good credit history when you apply for a mortgage, and that means paying all your bills on time, every time. Overdue payments will hurt your credit score which impacts whether you’re approved for financing.
A stable employment history is another significant item needed when applying for a mortgage. Lenders need to be able to see that you have the stability and continuity of income to repay the loan. Two years of consecutive employment is what lenders are looking for, and they verify this information through employment stubs or W-2 forms.
Don’t Open or Close Credit Accounts
If you’re looking for a new home, there’s a good chance you’re going to be looking to furnish and decorate it as well. While that big furniture sale next weekend might be tempting, it’s best to put off opening any new credit accounts or lines of credit until your loan is closed. Each loan is comprised of different terms and conditions and taking on more debt could impact the loan you receive or change one already in process. The same concept applies to existing credit accounts. While you should hold off on opening a new line of credit or account, you should also avoid closing any existing accounts. Each item on your credit report contributes to your credit history. The longer your credit history, especially with a good payment record, the better.
Learn About Your Loan Options
There are plenty of loan options available, and it’s not difficult to learn the basics about what’s out there and what fits your situation. VA, FHA, USDA, Jumbo, and Conventional are just a few to research along with fixed-rate and adjustable rate loan options. Not sure what is the best fit for you? Sit down with an expert Loan Officer, and let them help you weigh your options.
Discover What is Affordable
Once you have committed to the decision of buying a home, your first step is to get pre-approved by a lender. Keep in mind that pre-approval is different than prequalification. Getting prequalified gives you an idea of how much you can afford, while pre-approval takes an in-depth look at your credit report and ability to purchase a home. This will save you time in the long run because you will only look at houses within your price range.
If you’re thinking about buying a house, call one of our experienced loan officers today!