Applying for a mortgage is a serious step, so you should always take the time to do your research and prepare before you take it. Our team at Harbor Mortgage Company has helped countless people apply for mortgages, and we want to help you get the best possible results from the process. In order to do that, we have put together this article on the key things you need to know before you apply for a mortgage.
• Your Credit. Before you apply for a mortgage, take a good look at your credit score to make sure that it’s in good shape, as poor credit will make you look like a risky prospect to mortgage lenders. While different lenders and types of mortgages have different requirements, a score of 620 is the minimum required to apply for a conventional mortgage.
• Your Finances. Another thing to look at before applying for a mortgage is your current finances. You need to know how much you can afford to pay every month in order to figure out how much you can borrow. Prior to applying for a mortgage, we encourage to gather your financial information, such as your monthly budget, pay stubs, bank statements, credit card statements, and taxes from recent years. A mortgage professional can then help you determine the amount you can afford based on your debt-to-income ratio and give you estimates of what to expect for things like the mortgage principal, interest, and property taxes on the amount of the loan you qualify for.
• Your Mortgage Options. A third thing to research before applying for a mortgage is the mortgage options available to you. For example, if you are a current or retired member of the US Armed Forces, you may qualify for a low-interest mortgage through the VA. Make sure that the mortgage you are applying for is the right option for you. Again, a qualified mortgage professional can be very helpful in making sure you know all of the available options, so you can pick the best one for your situation.