It’s no secret that getting a mortgage can be stressful. There is all the paperwork and questions to ask or answer, and the uncertainty while you wait. If you don’t get approved, how will you be able to purchase the house you want?
If you prepare yourself though, getting a mortgage doesn’t have to be that bad. By being confident in what you know, gathering all the necessary documents ahead of time, and staying organized, you can make the mortgage process go by smoothly.
Try these five tips when you’re applying for a conventional mortgage.
Keep a Good Credit Score
Your credit score plays a crucial role in the ability to get a mortgage. A credit score shows lenders how reliable you are for paying back loans and debt. If you continue to miss payments or have collections come to your door, your credit score will reflect that and be quite low.
However, if you never miss a payment on bills, credit card payments, and other loans, your credit score will be quite high. That is what you want – a high credit score. So spend some time improving your credit by staying up-to-date with all of your payments, especially when using your credit card.
Stick to Your Price Range
It may be tempting to extend your mortgage so that you can afford a more expensive house. If you cannot afford it though, you’ll be stuck in house debt for quite some time. Not only that, there’s a chance you may not even get approved if your mortgage request is unrealistic to your current financial situation.
Use a mortgage payment calculator on www.uffexpress.com to help give you an idea of what you can afford. You’ll get an estimate of what your monthly mortgage payments would be with current interest rates and a down payment.
Have a Cash Reserve
If you want to help your chance of getting a mortgage, having a cash reserve will help. Even if you can afford your monthly mortgage payments with no problem, the lender will want to know whether or not you can continue to afford them if you lost your job. Having money set aside into a reserve or emergency fund will give the lender peace knowing you won’t default on your loan in unfortunate circumstances.
Gather All the Necessary Documents
To make the mortgage process go smoothly, have every document you need ready ahead of time. Here are a few of the many documents you’ll need for your mortgage:
- Pay stubs
- Bank statements
- Tax return statements for the last two years
- List of debts and assets
- Credit report
- Signed sales agreement
Typically, you don’t buy the first house that you visit. So, why would you go with the first quote you get from a lender? Shop around with different lenders, even if you know which one you prefer to go with. You’ll soon notice that each lender may give you a different quote, some better than others. Gather quotes from multiple lenders and use what you know to negotiate the best deal for you.