8 Do’s And Don’ts When Applying For A Mortgage
Applying for a mortgage is not a walk in the park. There are minimum requirements you need to qualify for, and tons of considerations to consider. If you plan on buying a house, make sure to keep the following do’s and don’ts when applying for a home loan.
Improve Your Score Before Applying
When it comes to home loans, there is a minimum FICO score requirement. This will depend on the type of home loan you’re applying for. Make sure you build your score and see if yours qualifies you for a home loan. If not, work on improving it before applying for a mortgage.
Good Read: What Is Credit and How Is It Used?
Don’t Take Your Credit Report For Granted
A borrower’s credit report is another factor lenders use to determine if you’re a high-risk loaner or not. Thankfully, you can get free credit reports every year. Use this to your advantage and make sure to corrects errors, if there are any. Ensure it’s accurate and watch out for suspicious items.
Maintain A Good DTI Ratio
Your Debt-To-Income Ratio measures your total monthly income compared to your debt repayment each month. A good DTI ratio is no more than 36%. Aim for a lower DTI ratio, and you’ll get better chances of getting approved for Mortgage Loans San Antonio.
Don’t Just Focus On The Purchase Price And Upfront Fees
Many mortgage lenders advertise mortgage options by merely stating the minimum down payment required, interest fees, and total purchase price. Take note that there are other fees to consider, like closing costs, insurance, and home inspection fees. Aside from that, you’ll also have to take care of property taxes, repair, and maintenance along with your monthly bills and expenses.
Putting Down Only The Minimum Down Payment
Thanks to the many Mortgage Loans San Antonio available, one can pay a down payment fee lower than the usual 20%. However, just because you can pay the minimum DP doesn’t mean you should settle on this minimum amount. If you can, do save up a bigger down payment, then do so. This way, you can enjoy better rates and terms.
Do Employ A Property Lawyer When Buying A House
Not all states require home buyers to have a lawyer present during the home-buying process. However, employing a lawyer will allow you to ensure all contracts are fair and legal. You can ask your lawyer to negotiate on your behalf and make sure you understand all terms and conditions before finalizing the sale.
Good Read: Do I Need a Lawyer to Buy a House?
Don’t Forget To Shop Around For Mortgage Lenders
Just because your bank offered to finance your home purchase already meant you should stop and accept their offer. There are lots of lenders willing to help you realize your dream home purchase. Make sure to shop around for lenders and compare their rates. You get to save tens of thousands of dollars if you get to find the best lender to work with.
Do Have A Steady Employment And Income Source
Lenders will usually ask their borrowers to provide at least two years’ worth of paycheck. If you can prove your employment status and shows you’re capable of comfortably paying off the loan, you’ll have better chances of mortgage approval.