The Real Estate Encyclopedia
How Do I Prepare To Apply For A Home Mortgage To Be Approved?
Category - Home Buying Questions - General Home Buying FAQ's

When planning to buy a home, the following steps are suggested, in order to ensure the applicant will be approved at the lowest interest rate:

 

Ø       Pay off as much credit card debt as possible in advance of applying for the loan

Ø       Save at least 10% to 15% of your monthly salary by placing it in an interest bearing account or through your employer’s 401K plan. Earmark a portion of these savings toward at least a 10% down payment on the home

 

Ø       Do not take on any new payments (e.g. do not buy a new car, appliances, furniture, etc.)

 

Ø       Make sure you can afford the total cost of owning a home, not just the mortgage payments (experts suggest a borrower consider at least 40% additional costs for  incidentals such as property taxes, Home Owner’s Association, repair and maintenance).

 

Ø       Obtain a credit report regularly and consider hiring a professional service to assist you in “repairing” your credit if necessary.  Consult with a trustworthy lender or mortgage broker and enlist their help to identify a serious service provider.  Many mortgage brokers and lenders will even refund the cost of this service to retain you as their client and be allowed to process your loan.

 

Ø       Limit the purchase price of your new home to what you can easily afford.  Start small and then upgrade. 

 

Ø       Identify the purchase price you and your spouse can afford on just one salary. 

 

Ø       Although an investment in a home is the soundest financial investment a person can make in their life, carefully determine the best time to do so, based on your finances.  Consult a financial advisor or accountant for a realistic view of your financial status.

 

Ø       Select a responsible real estate broker or agent who can help you find the best home within your means.  Real Estate agents typically can recommend most other related service providers such as mortgage brokers or insurance services.  Be sure to ask your agent to provide you with several names and then interview and comparison-shop to find the best service. 

 
Category(s)
Mortgage Questions - Mortgage Loans FAQ's
Home Buying Questions - General Home Buying FAQ's
Home Buying Questions - Buying Legal & Closing FAQ's
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