If you are thinking about purchasing your first house, congratulations. Becoming a homeowner is major life milestone that can help lead you toward many years of happiness. That said, becoming a homeowner is also a major financial decision. If you will be attempting to take out a mortgage loan in order to buy your house, you will need to make sure all of your financial ducks are in a row before you head to the bank. Here are a few things you should do before applying in order to improve your chances of mortgage loan approval.
Closely Inspect Your Credit History Line by Line
First things first, reach out to all three major credit bureaus and pull your credit reports. Go over the reports in detail, searching line by line for any hint of an inaccuracy. You want to find and correct any potential mistakes long before the bank does. Reach out to the creditor or the credit bureau as needed before you make your next move.
Come Up with a Budget That Includes All Expenses Both Big and Small
Next, you need to figure out just how much house you can afford. You can do this by creating a budget of all incoming money and all outgoing expenses. When including the new expenses from the house, don't forget to add your homeowners' insurance, property taxes, all utilities and any other fees that might come up. Having all of this information documented can impress your potential lender when you go in to talk about the mortgage loan. It will also help you make sure you stay on track once the house is actually yours.
Have a Contingency Plan
What would happen if you were to suddenly lose your job after getting the loan? How quickly could you find employment again? Do you have enough money in emergency funds that you would be OK for a while without a main source of income? Take a look at your stock portfolio and prospects for future employment in your industry (or through a side gig) to make sure you will still be prepared to handle the mortgage even in a worst-case scenario.
Before you apply for a mortgage loan, take some time to get a complete financial picture. Pull your credit reports, write up a budget and make sure you will be OK even if things suddenly go sideways. Only then will you be prepared to reach out to a mortgage lender for more information. To learn more, contact a company like Blue Wave Funding.Share
15 April 2018
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