“How do I prepare to get a mortgage?”
Talk about a frequently asked question. The fact of the matter is that most people aren’t aware that there are things you can do to set yourself up to get a mortgage. Certainly, you need to fill out a mortgage application and retrieve the required documentation for your file, but did you know there are things you can do prior to applying that will set you up in the best way possible? Below are 4 tips that can put you in the best possible situation prior to applying for a mortgage.
- Find the best product for your situation – We believe in educating our members so they can be set up for long-term financial success. We offer a wide range of mortgage products and it can sometimes be a challenge for members to sort through all the details of each individual one. This is why every application we take comes with a discussion to determine the product that best fits your current situation. We are happy to help, and even if you aren’t ready to put in an application, we welcome the opportunity to sit and have a conversation about where you’re at currently and where you would like to be.
- Assess your debt-to-income ratio – Your debt-to-income ratio is determined by taking all of your monthly payments and dividing it by your monthly income. This ratio tells us how comfortably you can take on more debt. As you weigh the option of buying a home it helps to get credit card balances as low as possible and to potentially consolidate other outstanding debt into lower monthly payments. Every borrower is different and this may or may not be an option for you, but it is a key ratio that we look at when determining eligibility.
- Save, Save, Save – The purchase of a home comes at a cost. Of course there is the down payment and closing costs that come into play, but there are also other expenses that can get overlooked. These would include other purchases needed to maintain the home such as a lawn mower or snow blower. It is also recommended that a borrower has plenty of funds saved up in the event that something happens after you move into your new home. If the water heater all of a sudden quits, there is going to be a fairly substantial bill to replace it.
- Educate yourself about your credit situation – Credit is the biggest piece in determining what you can qualify for, but don’t be scared if you’re credit isn’t perfect. While you may not be able to qualify right now, there are steps that can be taken to help repair your credit and put you in a situation where you can purchase a home. We review each credit report with our applicants and try to find ways to improve scores if need be.
At the end of the day, here at SouthPoint we value our member’s financial well-being and we want to put you in the best possible situation to be successful. I hope that these few tips are helpful for you when you’re thinking about purchasing a home. We will gladly answer any questions you may have and would appreciate the opportunity to talk with you about your homeownership goals and objectives.