10 Things You Should Do Before You Get A Mortgage Buying a home is a big financial decision that requires careful planning and preparation. One of the most critical aspects of purchasing a home is getting a mortgage, which can be a daunting task for many people. Before you apply for a mortgage, there are several things you should do to ensure that you are ready for the financial responsibility of homeownership. In this blog post, we will discuss the ten things you should do before getting a mortgage. #1 – Check Your Credit Score Your credit score is one of the most crucial factors in determining whether you qualify for a mortgage and what interest rate you will receive. A good credit score is typically around 700 or higher, and the better your score, the lower your interest rate will be. Before you apply for a mortgage, check your credit score and report to make sure that there are no errors or inaccuracies that could negatively impact your score. If you have a low credit score, you may need to work on improving it before applying for a mortgage. Here at JR Mortgage Group, we can get borrowers approved with credit scores as low as 500, though 580+ is usually smoother. You should always consult your mortgage broker before writing yourself out of buying a home because your credit score might not start with a 7. #2 – Determine Your Budget Before you start looking for a home, you need to determine how much you can afford to spend. The general rule of thumb is that your monthly mortgage payment should not exceed 28% of your gross monthly income. You should also factor in other expenses, such as property taxes, homeowner’s insurance, and maintenance costs, to determine your total monthly housing costs. #3 – Save for a Down Payment Most lenders require a down payment of at least 3% to 20% of the home’s purchase price. The larger your down payment, the lower your monthly mortgage payment will be, and you may also qualify for a lower interest rate. Start saving for your down payment as early as possible to give yourself time to accumulate the necessary funds. #4 – Shop Around for Lenders Not all mortgage lenders are created equal, and you should shop around to find the best lender for your needs. Compare interest rates, fees, and loan terms from several lenders to find the most affordable and flexible mortgage for you. While your local bank or credit union may be the first institution you think of, it’s important to note that you can usually get more competitive terms and loan programs by going through a mortgage broker, who will shop hundreds of lenders for you. If getting approved is next on your list, we would love to help you here at JR Mortgage Group! #5 – Get Pre-Approved for a Mortgage Getting pre-approved for a mortgage can help you determine how much you can afford to spend on a home and give you an idea of what interest rate you will receive. Pre-approval involves submitting a mortgage application and providing documentation of your income, assets, and debt. Once you are pre-approved, you can start shopping for a home with confidence, knowing that you have already been approved for a mortgage. #6 – Avoid Major Purchases or Changes in Employment Lenders want to see stable employment and income history, so avoid making any major purchases or changing jobs before applying for a mortgage. Large purchases or changes in employment could affect your debt-to-income ratio and your ability to qualify for a mortgage. #7 – Find a Real Estate Agent A real estate agent will help you in finding a home to purchase, as agents have the ability to show homes that are on the market. Agents will also help in negotiating the home price, getting any seller credits, and working with your loan officer in walking you through the home purchase process. As a home buyer, a real estate agent does not cost you anything, as they are paid by the seller. #8 – Understand Your Mortgage Options There are several types of mortgages available, each with its own pros and cons. Talk to your loan officer and understand the different mortgage options available to you, such as fixed-rate mortgages, adjustable-rate mortgages, and government-backed loans. Your loan officer will guide you to the option that is most advantageous for your situation. #9 – Get a Home Inspection Before finalizing your home purchase, get a home inspection to identify any potential issues or needed repairs. A home inspection can help you negotiate the purchase price or determine if you need to make any repairs before moving in. #10 – Plan for Closing Costs Closing costs can add up quickly and typically range from 2% to 5% of the home’s purchase price. Plan for these costs in advance and budget accordingly to avoid any surprises at closing. Conclusion By following the ten things we have discussed in this blog post, you can ensure that you are ready for the financial responsibility of homeownership and get the best mortgage possible. Remember to check your credit score, determine your budget, save for a down payment, shop around for lenders, get pre-approved for a mortgage, avoid major purchases or changes in employment, find a real state agent, understand your mortgage options, get a home inspection, and plan for closing costs. By doing these things, you will be well-prepared to navigate the mortgage process and purchase your dream home. It’s also important to keep in mind that homeownership comes with additional expenses beyond the monthly mortgage payment. You’ll need to budget for property taxes, homeowners insurance, and maintenance costs, among other things. It’s a good idea to have an emergency fund in place to cover unexpected expenses that may arise. Ultimately, the decision to purchase a home and take on a mortgage is a personal one. It’s important to weigh the pros and cons and consider your financial situation carefully before making a decision. With proper planning and preparation, you can navigate the mortgage process with confidence and make the best decision for you and your family. Our loan officers here at JR Mortgage are ready to help make your home-buying dreams a reality and are on call 24/7 to help guide you though the mortgage process and ensure you are getting the most competitive terms and rate on the market. Give us a call today! JR Mortgage Group Wichita Kansas Click to Call or Text: (316) 247-9639 This entry has 0 replies Comments are closed.