Practical and Helpful Tips: Lenders

4 Important Mortgage Tips for the First-Time Home Buyer Arranging a mortgage certainly is a big commitment. It’s therefore important that you find the best deal possible if you are a first time home buyer. You’ll need to be in good financial shape in order to get approved and qualify for a good rate. This means that you must be aware of certain things before you can arrange for the mortgage. Below are a few tips to help you get the best possible deal: Plan your finances It’s vital that you take time to budget before you apply for a mortgage. To begin with, consider whether you’ll be able to afford paying back the amount you’re borrowing.To begin with consider whether you’re going to afford to pay back the amount you want to borrow. Next, you’ll need to be sure that the amount you borrow will be enough to purchase the property, with some spare left to cover associated costs. Do you expect to have any problems with the monthly repayments. Get a mortgage calculator to work out the math, so you’re well prepared before you approach a lender.
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Your credit score and credit history are among the factors your lender will consider when assessing how much of a risk you are. You should therefore have a look at your credit report before applying for the mortgage. The last thing the lender wants to see is that you have credit cards with huge balances. So make sure you’ve paid of your debts, or at least tried to keep the balances low. It also helps when you have no outstanding loans, such as when financing a new car. Having good credit shows your lender that you’re capable of managing your finances well, which increases your chances of getting approved. Length of loan This is definitely of one of the most important considerations. While a 15-year mortgage may be provided at lower interest rates, your monthly payments will be bigger than if the repayment period was stretched to 30 years. Taking a shorter-term mortgage would be a good idea if you can afford the large monthly payments. Job stability matters It helps if you have a stable job, because most lenders need to see that you have been in a certain job for a good amount of time. So if you’re thinking about changing jobs, you may want to secure the mortgage first before you proceed. Most lenders will only consider applicants who’ve been in their current jobs for a minimum of 3 – 6 months. Keep in mind that one of the things they will require is proof of income. That means getting the relevant documents from your employer. You may also need to provide pay slips and bank statements for the last three months, so they can have a look at your earning and spending patterns.