Do you think you are ready to become a home owner and take on your first mortgage? Having a house to call it your own is a dream for many individuals. But stop renting and purchasing a house is a very important decision to make, specially if you never done it before. We will list here the 5 most important things to consider when purchasing a home.
The first one is your employment. Have you been employed for at least two years? Are you stable at your job? Have you built up a good credit history to secure reasonable rates when you are applying for a mortgage? If the answer is yes, then it is a good indication that you can definitely consider getting a mortgage. Even if you are self-employed, if you are able to proof that you have a stable income and provide the latest tax returns, the lenders will be ok with it.
Secondly, low debt. If you have a high debt when applying for a mortgage, you most likely won’t get approved. So, be aware of your debts when considering taking on a mortgage. Lenders usually calculates your debt-to-income ratio, in order to determine how much you will be able to pay for the mortgage instalments monthly. As long as your debt to ratio is under 36% you will still be able to qualify for a mortgage.
Another important thing to consider when getting a mortgage is if you have enough savings. When purchasing a home, it is important to have the money to put towards the purchase, in order to cover the down payment and also some extra expenses that come with the mortgage. It’s important to mention that, the more you have to put upfront, less money you will have to borrow and consequently, pay back to the lender. Also, if you are by any chance outgrowing your space, if kids are getting bigger and you need more space or if the family is getting bigger, maybe it is a good time to consider getting your own place.
How to get the lowest interest rate on the market?
Getting your first mortgage might sound a little challenging, but it doesn’t have to be this way. First, you can contact a broker in your area, he will be able to help you navigate the process and also connect you with the best lender for your case. Also, when looking for a mortgage, you should definitely look for the lowest interest rates. If the market rates are low, it is the perfect time to purchase your dream home.
In addition to that, do not put all your savings into the down payment, for example. In case you have unexpected repairs with your new home, you won’t be able to cover those expenses. So, when choosing a house, be very realistic regarding the money you can actually spend on it, so you can also have some money set aside for an emergency.
Another key point in securing the lowest rates in the market is your credit score. Lenders will definitely take under consideration your credit score when deciding to approve you for the loan. So, the highest your credit score, the highest are the chances of getting approved for a mortgage and get the lowest rates on the market.
If you are looking to refinance or purchase a home over the next few months, contact us today at 877-296-2696 or email us at email@example.com.