Why Debt Consolidation Is a Good Idea
When you are thinking of leaving the renting field and getting a house of your own, you may have a difficult time knowing how to get a mortgage. The major housing crisis that occurred a couple of years ago has made the lenders become strict on the people they now give loans to.
You can begin by having knowledge on the monthly obligations you have. When planning to get a mortgage, you should note down your monthly income and the debts you are to pay. Your lender will ask you to provide two weeks of pay stubs for them to verify your income. The whole process will be harder if you have more than two sources of income or if you are self-employed. You can only get the mortgage approved once the lender is sure you can make the payments. You will get limitations to the limit the loan can be approved for if you have large debts to pay. Before you can choose to apply for the loan, you should strive to first pay off these debts.
Another thing that you need to do is check the health of the credit. You need to have a copy of your credit history and your recent credit score. It is good to ensure that your report does not have late payments or any negative remarks. If you have a low credit score, you will need to find cosigner who is qualified. It is also possible for you to get the mortgage after you wait until you have a good credit score. Keep away from applying for new credit some months before applying for the mortgage.
It is also crucial for you to make the decision on the mortgage budget. You need to take your time to know how much you will afford for a house without stressing yourself before going to the lender. Add together the amount for the house together with the insurance and the tax. It will be best to have an amount that is less than 35% of your total gross income. Your safest bet is getting a house that does not exceed 25% of your income.
Ensure you have also made a decision on the amount you have to save for the down payment. When you have analyzed the credit and worked on your budget, you will then need to work ion your down payment. Be aware that the real estate agents are there to convince you on getting more house than what you actually need. You may also find that you are facing the temptation on your own. You should make sure you only go for the payment you will manage to pay when your financial state is either good or bad.