10 Things You Should Do Prior To Applying For A Mortgage
By: Brian Torrance
Luckily for consumers, it's easier now than ever before to buy a home. But even though lenders are more willing to take risks on you, you still have to be prepared for the big event.
First, you should begin well in advance saving up for your down payment. Pay off credit card debt and make sure your payments are timely. You want your credit history to shine.
Second and third, make sure you polish your installment loans over any other debt you have built up. Lenders will want to know more about how seriously you take your car or student loan than your retail store cards. You should try harder to pay down your debt than saving up for a larger down payment. At least this way, the interest you'll be paying will be tax deductible.
Fourth, if you're planning on building up a lot of debt over the next several months, such as buying a new car or paying for your daughter's college tuition, get the mortgage first! The more inquiries you have, the lower your credit score.
Fifth, begin taking a portion of your monthly income and set it aside for the down payment once your credit card debt is paid off. Don't try to invest the money to get a better return, just save for now without the risk.
Sixth on your list is to stay away from big ticket item purchases at least 6 months prior to your mortgage application. Lenders will want to see how you handle a mortgage and they may be reluctant to add several hundred dollars to your monthly expenses.
Seventh and eighth, get pre-approved for your mortgage on a home you can afford, not pre-qualified. You don't want to strain your budget and you want to be sure of exactly how much house you can afford.
The last two, nine and ten, are all about responsibility. Make sure your loan type fits your lifestyle. If you want extra cash, then get a 30-year loan, even if you could manage a 15-year loan with a bit of a strain. And never ever default on your mortgage, because it can be financial suicide.
Brian Torrance is a loan specialist with Apex Personal Loans Store. Their area of speciality is personal loans, consolidation, and home equity loans. Visit http://www.apex-personal-loans.com/.