Tips to help you secure a mortgage
If you’re looking to buy your first home or your next home and the whole process is a little daunting, we’ve put together a few tips that will help make securing your mortgage/financing and the start of the home buying process a smooth one.
Prepare a Budget:
Not just one that includes the mortgage, but also incorporates property taxes, utilities, insurance, food, maintenance, vacations, misc. expenses etc. and once you have your budget, stick to it. Many people forget that there is more to owning a home than a mortgage payment. Unless you purchase a home through Genesis Builders group, you’ll also need to budget for some additional expenses such as:
• Home inspection
• Title insurance
Don’t forget to check out our blog about how Genesis Builders can help you save on these additional and surprise expenses.
Don’t use all of your savings for a down payment. You want to have cash on hand in the bank if there are any unexpected expenses that come up or to buy furniture etc.
Maintain your down payment in one (1) account and don’t move it. Lenders require a 90-day history of your down payment funds and if there are any large deposits the lender will need to know the source of the funds and this can result in a long and drawn-out process.
There is more to a mortgage than just the rate. You want to evaluate what your short- and long-term plans are and what the market is currently doing and the future projections. Will you be selling in the next 3 years? Is there a chance you will be relocating for work? Will you be looking to upgrade in the next 3-5 years and want to keep your current place? Do you get annual bonuses that you want to put down on your mortgage each year? Do you want an online portal to check your mortgage periodically? There are many moving parts to a mortgage that you want to make sure that you have the best mortgage product for you and not just a great rate.
Employment and Credit:
Despite paying your credit cards on time and without any missed payments, your credit score could be low if you keep a balance of more than 50%-75% of the credit limit. Maintaining a credit card balance below 50% of the limit may help you to secure a better rate for lenders.
Even after you get a mortgage commitment from a lender, if any circumstance changes such as debt level, credit score or your job, the lender can revoke the commitment. We’d advise you not to make any changes to your circumstance until you have the keys to your new home. The lender has the right to pull credit, call your employer or ask for bank statements right up until the mortgage closes.