If you’re applying for your first mortgage prior to buying your first home, congratulations! Entering the world of homeownership is exciting and a worthwhile investment. But before you start perusing listings, you need to make sure you’re ready to apply for your first mortgage. Here are our top three tips for preparing yourself and your finances for this financial commitment.
1. Monitor your credit—One of the biggest factors that will impact your loan terms and interest rate is your credit history. If you want to improve your creditworthiness, start monitoring your credit report. Before applying for your first mortgage, make sure your credit score is where you want it to be and that your credit report is as accurate as possible.
2. Boost your down payment—The more you can afford to put down as a down payment, the better your loan terms will be. Although there are many down payment programs that require minimal investment, we always recommend trying to boost your down payment as much as possible. Consider cutting spending and finding ways to increase your down payment fund before putting in a loan application.
3. Stay realistic—Although you may dream of living in a spacious, luxurious new build, this may not be the reality for your first home purchase. Stay grounded about what you can really afford when you purchase a house and try to keep your loan terms manageable for this first purchase.