Buying a new home is an exciting, emotionally-charged experience. Navigating the process may feel a little overwhelming, but there are things you can do to keep things on track. The Cushing Team here in Reno has years of experience helping people secure the homes of their dreams, and we have advice for those just beginning the process. Here are six application tips for your home loan.
1. Start By Reducing Any Debt
This is an important first step if you’ll be applying for a mortgage. Lenders will consider your current debt from things like credit cards, auto and student loans, and anything else you owe. The more debt you’re carrying, the less money you may be able to borrow. Do what you can to pay down or pay off outstanding credit card debt specifically before you apply.
2. Take a Close Look at Credit Scores & History
If you aren’t already familiar with your credit score, it’s time to brush up. Your credit score is based on a mix of information, including:
- The length of your credit history
- Your payment history, including late payments
- The kinds of credit accounts you have open
- How much credit you’re using compared to what you have available
- The number of recent inquiries for credit
Be sure that your credit record is accurate, because your score is a deciding factor in the interest rate of your loan. Note that the scores you get from varying sources will vary somewhat because they operate on different scales. If you notice any wild aberrations from one source to the next, take a close look at the report itself for errors or omissions.
3. Schedule a Meeting with a Mortgage Loan Consultant
Here at The Cushing Team, we love meeting with prospective buyers. It’s a great opportunity to share our expertise by making sure people get accurate, timely information. We can answer your questions, share details about current loan programs and products, and offer recommendations as you begin the home loan process – even if it’s still early days.
4. Start Organizing Paperwork
Applying for a home loan involves mountains of paperwork. You’ll need to complete the loan application itself, and you’ll also be asked to supply documents that paint a picture of your finances. Start a file with documents like pay stubs, recent tax returns, and bank statements. You can ask your mortgage loan consultant if you’ll need to gather other paperwork, such as divorce statements, pensions, social security, disability, etc.
5. Check Out Current Interest Rates
Ask your loan consultant about loan rates that will apply to you. Your consultant can also explain differences between options like fixed rate loans and adjustable-rate mortgages.
6. Be Clear on What You Can Afford
Your mortgage payment is just one of the costs associated with owning a home. Get an idea of what you can afford with a mortgage pre-appoval, but remember to factor for things like homeowner’s association fees, property taxes, utilities, and any improvements or repairs.
Don’t Be Afraid to Ask for Help!
Having questions is a natural part of the home loan process, and the Cushing Team is here to help. Contact our team today, and let us clarify the process so you can start things off on the right foot.