If you’re planning on buying a home and financing your purchase, you’ll need to apply for a mortgage. For most people, a mortgage is the largest amount of money they’ll ever borrow. Because it’s such an important loan, it’s critical to not rush through the process. If you’re going to apply for a mortgage, you’ll want to:
Check your credit
You’ll want to make sure your credit is good before you apply for your mortgage. If it needs a lot of work, there is a good chance you may not qualify, and you won’t want to waste a hard inquiry. By pulling your credit report beforehand and knowing where you stand, you’ll know if you need to work on anything before applying. If you have past due accounts or anything in collections, for example, you’ll want to take care of these things and make sure the matters are resolved first. Also bear in mind that even after cleaning up your credit, it can take a while for the changes to reflect. Your credit score may or may not improve, but be sure to give it some time. Better credit doesn’t only increase your chances of approval, but also helps increase your chances at receiving a better rate.
Figure out your housing budget
When applying for a mortgage, you’ll need to know how much you’re looking to borrow, or at least have a general idea. Figure out how much you want your housing budget to be approximately, and remember that you’ll usually need a down payment, with the rest being financed. Once you are approved for a certain amount, you can get a better idea of what type of homes to look for, as you’ll now have a price range. Don’t get discouraged if you aren’t initially approved for the amount you were hoping for. You could always lower your housing budget, or you could wait until your financial and/or credit situation improves and reapply.
Collect the necessary documents
Whether you’ll be supplying them in person, or faxing/scanning them and sending them to a lender electronically, you’ll need to gather the required paperwork. Every lender will have their own requirements, so be sure to find out ahead of time so that you’re prepared. Generally, however, this will include bank statements, pay stubs, and tax records.
Compare offers from different lenders
If you’re approved for a mortgage, congratulations! It’s important before accepting, however, to apply with other lenders and compare offers. This is often expected and you won’t risk your initial application by seeing what other mortgage lenders can offer you. You might be able to get approved for the amount you originally wanted with another lender, or you might receive a lower interest rate. If you just accept the first offer you receive, you’ll never know what else you could have qualified for.
Are you saving up to buy a home, but could use some extra cash to help speed along the process? It can take a while to have what you need to finalize your purchase; even if you’re getting a mortgage, you still need the money for your down payment and closing costs. If you’re receiving long-term structured settlement or annuity payments, you might already have the money you need, but it’s tied up in a long-term payment stream. Saving up those periodic payments until you get the amount you need might not be a practical option, considering it can take a very long time to receive most or all of your payments. Instead, explore your other options, like selling future payments to Peachtree. By purchasing some or all of your future payments, we can provide you with a lump sum of cash, which can potentially turn your dreams of homeownership into a reality. Contact Peachtree Financial Solutions today for more information and to receive your completely free quote!
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.