Reasons to Consider Debt Consolidation
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. Take the time to document all the debt payments and your monthly income. You will need to give the lender pay stubs for two weeks so that they verify the income you get. You are sure going to find the process more complicated if you are self-employed. You can only get the mortgage approved once the lender is sure you can make the payments. If there are large debt payments that you need to make, then you will only be approved for a small mortgage. Before you can choose to apply for the loan, you should strive to first pay off these debts.
When thinking of getting a mortgage, you will first need to check your credit health. You need to have a copy of your credit history and your recent credit score. It is good to make sure you do not have any late payment and errors on your report. You will require to have a qualified cosigner if your credit score is low. You can also choose to wait until you have improved your credit score 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.
It is also crucial for you to make the decision on the mortgage budget. 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. You should ensure the total amount is not more than 35% of your gross income. Your safest bet is getting a house that does not exceed 25% of your income.
It is also good to decide the amount you will save for a down payment. You should work on the down payment after selecting your budget and analyzed your credit. 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. 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.