Getting a mortgage can be quite the challenge. Lenders are very strict on their requirements and they look at many different financial aspects to determine if you are eligible for a loan. But, being prepared before you apply for that loan, and knowing what to do in advance will help make the process smoother,
and potentially help you secure that loan.
Here’s some helpful advice:
- Don’t change or quit your job
- Don’t be late on any credit card or loan payments.
- Don’t incur any new debt
- Don’t apply, inquire, or accept any new credit, or apply for a new loan
- Don’t cosign for a loan
- Don’t pay off your debts or consolidate your debt – just reduce your debt
- Don’t file for bankruptcy, or do a shortsale or foreclosure
- Don’t throw away pay stubs or bank statements
- Don’t close any of your credit cards
- Don’t lie on your mortgage application (they will catch you)
- Do Keep your money in the bank, not your mattress
- Do establish some good credit. If you have no credit, It can take several months –up to a year for it to show on all the credit reports. ·
- Do check your credit score in advance. This will let you know if your credit score needs some help before applying for that loan
- Do have your paystubs, bank statements and tax returns ready for your lender
- Do as much as possible to reduce your debt. This will free up credit and can help your credit score. Reducing your debt can also increase the amount you can borrow.
- Do save your money for a down payment before you apply for a mortgage? The amount you save will determine the type of loan you qualify for, and the amount you can borrow.
- Do your homework with your finances and create a budget. You need to make sure buying a house makes financial sense, and does not jeopardize you or your family.
- Do have what I call a Foreclosure fund. Have enough additional money in the bank to carry your home and its expenses for a year in the event your income is interrupted. You don’t want to lose your home. Life happens, so be prepared.