If you have a job where you are finally making good money and you are ready to purchase a home, so you can work towards homeownership, you need to get approved for a mortgage. If you have never had to apply for a loan before, and you aren't sure what to do, dig into the following information.
Know What Affects Your Interest Rate Potential
There are several things that affect your credit score, and your credit score will affect your interest rate. If you have the following things, it will be difficult to get a low rate:
You need to show that you have a track record of being an on time bill payer if you want to get approved for a mortgage, and if you want to get a low rate.
Put as Much as You Can Down and Avoid PMI
You want to put as much down as you can, and you want to have enough in your savings account for 3 house payments. This way if you lost your source of income, or if you had to take time away from work, you wouldn't have to stress about paying the mortgage.
Also, if you put as much down as you can right away, you have that much equity already into the house, which would be ideal if you have to sell. You also don't want to pay private mortgage insurance on top of your mortgage, so try to put enough down that you don't have to pay PMI.
Ask About a Bi-Monthly Mortgage
If you are buying a home that is well below what you are approved to borrow, and you think that you could make two smaller payments throughout the month, that would end up being more money overall for the month, go for it. This just helps you pay off your mortgage faster, you should be able to get a lower interest rate, and you can avoid interest over time.
There are a lot of different things that can affect if you get approved for a home mortgage or not, so you may want to start by talking with a loan officer. Go over your finances, budget, credit and more so you can see if you are going to be a desirable loan candidate to get your application approved.
For more information, contact a business such as Rio Grande Credit Union.Share
26 February 2018
As I see it, one problem with most budgeting programs is that they don't account for the "real life" factor. Anyone can tell you not to spend anything and to save everything, but when it comes to feeding your kids or dealing with a medical emergency, most budgets get thrown out the window. I realized that this was a problem, so I decided to start focusing on budgeting for real life. I decided to forget everything that I knew about budgeting and started working with a clean slate. This blog is all about budgeting for real life and knowing how to spend your money the smart way.