Things To Do Before Applying For A Mortgage

Applying for a mortgage is a big step towards landing your dream house, so it's natural that you would want to go into it as prepared as possible. Here are some things that you can do to up your chances of getting a great mortgage package.

Consolidate Debts

One of the biggest things that can stand in the way of getting a great mortgage approval is too many outstanding debts. It may benefit you to pay off certain small loans in the interest of consolidating your debt list into a smaller amount. It may be helpful to consolidate debts under one lender, but be careful to ensure that the terms are as favorable as keeping loans separate. When you're rearranging your finances, it definitely doesn't hurt to consult a certified financial planner who can help you evaluate each option to make sure you're getting a good deal. 

Ask for a Raise

Now is a good time to ask for a raise if you are in the running. That will reflect very positively on your mortgage loan offer, since current income is a big thing that goes into consideration with loan amounts and interest rates. And when you have a major life event in the balance, like buying a home, it can give you additional rationale for requesting a raise.

Evaluate Your Expenses

One thing that lenders will ask you about is your obligations in addition to debt and rent payments. That affects how they view your salary and the amounts that you have. Big ticket items like medical expenses may not be avoidable, but you could avoid something like a large monthly car rental payment.

Check Your Credit

Even if you think you have great credit, it is a good idea to double check before you apply for a mortgage. Sometimes, the credit companies can make the mistake of reporting something on your credit that isn't accurate. You wouldn't want to make the mistake of getting a subpar lending offer because you didn't know you had a fraudulent charge on your credit. Get your free credit reports from all three lenders, because sometimes one credit bureau reports items that the others don't.

Consider Mortgage Companies Carefully

Finally, be sure that you choose the best company to solicit a mortgage from. Each lender can see what other credit requests were made recently, and that may play into their decision to lend. A great mortgage company should offer flexible terms, reasonable rates, and great customer service. It's a big financial decision where you deserve to have a quality lending experience.  


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