Top 10 Dos and Don’ts of Getting a Mortgage

From enlightenme.com

Many people are able to buy houses more than ever recently. With patience and careful planning, you may be able to get the best mortgage loan to buy that dream home you are destined to get!

One of the most important things to consider when planning to buy a house is to make sure you are financially set and stable. By making sure you have everything in check, such as your credit and savings, your home buying process could be easier than you think. There are many other things to consider when getting a mortgage loan. Read more for the dos and don’ts of getting a mortgage.

1. Do pay your loans, credit cards, and other bills on time, particularly around the months leading up to the time you get ready to apply for a mortgage. This will ensure that your credit score is at the best mark, scoring you an ideal loan!
2. Don’t buy anything big for a few months, especially before applying for the mortgage loan. Buying a $16,000 car will not only take away from the money you may have for a down payment, but it will also affect your score from the credit scoring system mortgage lenders use.
3. Do contemplate paying off more of your consumer debt and maybe put down a smaller amount at closing. This will help you to replace high-interest debt with lower-rate mortgage debt.
4. Don’t just pre-qualify for a mortgage loan, try to get pre-approved. If home buyers allow the lenders to pull their credit reports and check debt-to-income ratios, that would put a borrower much closer to getting a loan.
5. If you just have to miss some type of payment, do consider missing the credit card payment first, and then the payment on an installment loan you may have. This is because the system that lenders use looks at the performance of loans that are similar to the one of which you are trying to obtain.
6. Don’t attempt to get a seven-bedroom mansion in the hills if you know you are going to have to stretch your budget to make your mortgage payments.
7. Do increase your down payment by saving as much as you can, and as often as you can.
8. Don’t forget the type of money personality you have when applying for a mortgage. People who spend a lot of their extra cash on dining out and movies twice or three times a week won’t be able to invest the money saved on a monthly payment, which can help you accrue equity in your home much faster.
9. Do try to get a mortgage first, if there are going to be multiple financial obligations popping up in the near future. If you are going to be applying for new credit cards, the inquiry alone can affect your credit score.
10. Don’t forget that owning a home comes with many burdens. It is less costly to miss a rent payment than it is to default on a loan.