The Benefits of Debt Consolidation
When you are thinking of getting a house, you are likely going to not know what to do to get a mortgage. Due to the housing crisis that occurred, the lenders are now strict with who they approve for this loan.
The first thing to do is knowing about your monthly debt obligations. When planning to get a mortgage, you should note down your monthly income and the debts you are to pay. For the lender to verify the income you get, they will ask for two weeks of pay stubs. The whole process will be harder if you have more than two sources of income or if you are self-employed. Once the lender is sure that you can pay for the mortgage, they will have your mortgage approved. If there are large debt payments that you need to make, then you will only be approved for a small mortgage. It is best that you pay off these debts before you can apply for this loan.
Another thing that you need to do is check the health of the credit. You need to have a copy of your credit history and your recent credit score. It is good to ensure that your report does not have late payments or any negative remarks. If you have a low credit score, you will need to find cosigner who is qualified. You also have the option of waiting for your credit score to increase before you get the mortgage. Keep away from applying for new credit some months before applying for the mortgage.
Your mortgage budget is also something that you need to decide on. You need to take your time to know how much you will afford for a house without stressing yourself before going to the lender. You should sit down and calculate the total amount you will need for your home together with the taxes and insurance added. After adding this, the amount you get needs to be less than 35% the amount you are getting for your income. You should aim at getting a house payment that is not more than 25% of your gross income.
It is also good to decide the amount you will save for a down payment. After you look at your credit and determined the budget you will work with, the next step will be to work on your down payment. You should know that the real estate agents tend to encourage you on getting the property that is more costly than what you can afford. It is also possible for you to be tempted yourself. On the other hand, the best thing is to only go for the payment you will be able to pay anytime; whether the financial state is a good one or a bad one.
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