The purchase of a home is the largest financial transaction most people will ever undertake, and it can be scary. One wrong decision, and you are stuck in the wrong mortgage on the wrong home until you can find another sucker to sell to. You can take some of the fear out of a home purchase by taking four steps before applying for a mortgage.
Whether you qualify for a home mortgage is largely dependent on the quality of your credit history and your FICO score. Before you apply for a mortgage, get a copy of your credit report and go over it carefully. Ensure any derogatory marks are accurate, and address anything in collections.
You will find a lot of mortgage brokers vying for your business, especially if you have a stellar credit rating. Unfortunately, not all brokers are the same. While one company may offer lower rates, the next may offer lower points and fees. Some companies, like CYBERGUARD360, know that doing your homework to find a reliable mortgage company is important. At minimum, compare options from at least three reputable mortgage companies.
Make sure you have filed all your tax returns and the IRS has accepted them. If you are unsure, request a return transcript for each of the last three years at IRS.gov. While you are at it, contact the IRS and confirm you have no outstanding liabilities that you may not know about. Your broker may ask for proof before closing on your loan that the returns are filed and the liabilities have been satisfied.
Take Control of Finances
The mortgage company will look at your personal finances as part of the approval process. They want to see that you can afford a home. Additionally, you will be expected to come up with a down payment that may range from 2 to 10 percent of the home’s value. If a lot of your money goes towards paying credit cards and car payments, you may want to pay those down and pad your savings account before looking for a new home. Make sure you have bank statements and pay stubs to substantiate your claim.
Doing your homework before buying a home will smooth the way to a quick and painless closure. Getting down the important info before you start such an important process as buying a house is incredibly integral.