A Home Buyer’s Guide to the Mortgage Application Process

What Do You Need To Know?

Buying a home is one of the largest investments that a person will make in their lifetime. Before you sign a mortgage contract with your lender, you need to know as much as you can about the home buying process. Continue reading to learn more about credit scores, what to look for in a mortgage lender and the application process.

Many people turn to a mortgage broker for information on getting a loan. In addition to this, you can use the Internet to research on how to get a loan, the different types of loans and how to determine the right priced house for your budget. The internet is a veritable storehouse of information on home loans.

Have You Checked You Credit Rating?

The first thing you should know is how important it is to have good credit. You will better qualify for low-interest mortgages if you have a high credit score. If your credit is less than stellar, you should work on improving it as you will be able to get better financing as your credit improves.

What is Your DTI?

Another thing that lenders will look at is your debt to income ratio (DTI). This is a measurement of the amount of debt you carry in comparison to your income level. A lower ratio will help you get a better interest rate on your home loan. It does not take a lot of mathematical skills to determine your DTI ratio. There are many wonderful calculators online that can help you determine your DTI. Or, you can calculate it yourself by taking the total of your monthly payments and dividing them by your gross monthly income.

Once you have determined that your credit is good and what your debt to income ratio is, it is time to visit a mortgage lender. The application is quite simple. You will need to have at least a month’s worth of paystubs, two forms of identification and a list of your bills. Your mortgage lender will help you fill out your application for a mortgage.

What’s the Easy Way?

When it comes to mortgage lenders, there are many to choose from. If you would like to find out about the different types of mortgages available, search online. You will find information about the different types of mortgage that you may qualify for along with the pros and cons of each type of mortgage.

Although the internet is a great way to find out about the different loans available, nothing is better than visiting a mortgage broker. Your mortgage broker will want to discuss your budget, your expectations and specific needs to determine the best type of mortgage for your unique situation.

Getting it All Together

You can help speed up the application process by having all of your documentation and information in an organized and easy to read format. Ensure that you have included everything that the lender will need to process your loan. Going the extra mile and having everything organized and presented in a portfolio will save you and the lender time. The sooner you can get the application process started, the closer you are to buying your dream home.

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