Why Debt Consolidation Is a Good Idea
It is possible to have a difficult time trying to figure out how to get a mortgage when considering getting your own property. Lenders have now become strict on who they approve to get the loans due to the housing crisis that happened several years ago.
The first thing to do is knowing about your monthly debt obligations. Documenting your monthly income and the debts you are to pay is something you need to do when preparing to apply for a mortgage. You will need to give the lender pay stubs for two weeks so that they verify the income you get. The whole process will be harder if you have more than two sources of income or if you are self-employed. The lender will need to determine if you can pay the mortgage payment before they approve it. You will get limitations to the limit the loan can be approved for if you have large debts to pay. Before you can choose to apply for the loan, you should strive to first pay off these debts.
Another thing that you need to do is check the health of the credit. Ensure you have your current credit score and a report of your credit history before getting a mortgage. Ensure your report does not have any errors or negative marks like making late payments. You will require to have a qualified cosigner if your credit score is low. You also have the option of waiting for your credit score to increase before you get the mortgage. Before you choose to apply for the mortgage, it is best for you to stay several months without applying for new credit.
Your mortgage budget is also something that you need to decide on. It is important for you to know how much house you can afford comfortably before you meet with the lender. You should add your full housing payment with the taxes and the insurance. It will be best to have an amount that is less than 35% of your total gross income. Getting property not more than 25% of your gross income is the best thing for you to do.
Ensure you have also made a decision on the amount you have to save for the 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. In some situations, the temptation to do this can come to you all by yourself. However, the best thing for you is to stick by the payment you are sure you can afford when in a good financial state and a bad financial state.