Whether you are a potential home buyer looking to find a home of your own, or an existing homeowner looking for better terms and/ or rate on your mortgage, it's important to know a little more about the process of getting the best one at the best terms that fits your needs, priorities and situation. Since the vast majority of individuals use a Mortgage loan to pay for their house, I felt it might be helpful to review some things to consider from the onset.
With that in mind, this article will attempt to briefly examine and consider, 5 steps, you might wish to consider following to ensure this often tense, stressful process and period becomes somewhat easier and more successful.
1. Check, and fully review, your credit report: Especially in today's atmosphere and environment where there is so much Identity Theft, it's smart to begin by doing this. First, review the report for accuracy, etc. Then, look at the items and report the way the lending institution might. Begin, by looking at your debt - to - income ratio. The desirable maximum for this changes periodically but if you keep it to about one - third (maximum), you'll probably be somewhat safe. Prepare about 3 months or more before you begin the process and pay - down, your debt. Do not wait to the last - minute to do so. If you can do this a year or more before, it's even better! Look at the report, and consider whether if you were the lender, would you consider you to be a good risk?
2. Repair: One of the primary reasons to begin Step One as far in advance as possible is to give you the opportunity, to make any necessary repairs and to enhance your credit rating as much as possible. Be careful to avoid requesting or taking out any new credit during this period because doing so might harm or reduce your credit score!
3. Patiently wait after steps one and two: Optimally, waiting a year will get you the best results but you should always wait at least 3 or more months after you've made your repairs and/ or fixes, and/ or paid - it - down, to best position yourself.
4. Stay away from any credit offers, etc, during this period: That offer you get in a retail store, which will give you immediately an extra discount on your purchase, is not harmless, but rather might negatively impact your overall credit. Keep your eyes on the target!
5. Be prepared for the down - payment: Most lenders will want to know where your down - payment and other funds come from. At least 3 or more months in advance, place your probable down - payment in an account you can clearly provide statements for, demonstrating your ownership, etc. Also, realize most lenders seek borrowers with a significant amount of other assets, etc.
A little bit of preparation and paying attention to some relevant details will generally make the process go smoother and easier and more successfully. If you really want and/ or need that mortgage, do all you can to be prepared!
Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, conducted personal development seminars, for 4 decades, and a RE Licensed Salesperson, for a decade+. Rich has written three books and thousands of articles. Visit his website here or like his real estate Facebook page.
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