June 23rd, 2016 9:47 AM by Jackie A. Graves, President
Buying your first house is such an exciting time. You've
finally decided not to send a rent check to someone anymore, and you're now off
on a journey to get something all your own. Sometimes getting your first home
loan can be a challenge, though. Not everyone will qualify for a mortgage or be
ready to make the payments on their first home.
However, there are a few things
you can do before starting the home search process to make sure your finances
are in order so that you have the best chance of securing a home loan at a
Here they are:
You are entitled to a free credit report from each of the three
credit bureaus every year at www.AnnualCreditReport.com.
Before you look at any houses, be sure to pull this report. If you are planning
to purchase a house with your spouse, they should pull their credit report too.
When you get your
credit report, look for any adverse accounts that may cause a lender
to disqualify you from a home loan. See if you can settle any outstanding debts
or fix any errors that may be on your account. According to a Federal Trade Commission study, at least one
in five people have errors on their credit reports that could affect their
ability to get the best loans, so be sure to scan your report thoroughly. Does
every account on your report match one you currently have? Is there something
on there you don't recognize? If so, send a letter to the credit bureau and ask
them to make corrections. This can help improve your credit score, which will
make you a more desirable borrower to mortgage lenders.
When you apply for your first
home loan, your lender will ask you for copies of all of your bank statements.
They want to know how much money you currently have in your accounts. You
should be genuine about this because you'll have to explain any amount that you
have in your accounts that is unusually large.
The best thing you can do is to
prepare for this by increasing your savings. Work extra jobs, have a big garage
sale, or cut back on your expenses and save the difference. All of this is good
because you'll want to save a large down payment as well so that you can own a
large portion of your home from the beginning. A sizable down payment also
helps to keep your monthly payment low.
When it comes time to get a mortgage, you shouldn't go with the
first lender who offers you a loan. Instead, email or call several lenders to
get pre-approved for your mortgage. When you go through this process, you can
see how well you work with each of the lenders, how responsive they are, and if
you think they'll help you moving forward with your loan. These lenders will
often offer different interest rates and terms, and they will often have
different fees. So, if you shop
around, you'll be more likely to get the best possible mortgage for
Ultimately, buying your first
home is a very exciting time, but to ensure that the process goes smoothly,
it's important to do your research, make sure you are financially ready, and
shop around for the best loan for you.
By Catherine Alford - To view
the original article click here