4 Important Mortgage Tips for the First-Time Home Buyer Taking a mortgage is no doubt a major commitment. If you’re a first-time home buyer, therefore, it’s important that you find the best deal available. In order to get approval and qualify for a good rate, you’ll need to be in great financial shape. This means that you must be aware of certain things before you can arrange for the mortgage. Here are some tips that can help you secure the best mortgage possible: Have a financial plan It’s important to take a bit of time to plan your finances before applying for the mortgage. To begin with, consider whether you’ll be able to afford paying back the amount you’re borrowing.To begin with consider whether you’re going to afford to pay back the amount you want to borrow. Next, you’ll need to be sure that the amount you borrow will be enough to purchase the property, with some spare left to cover associated costs. For the monthly payments, do you anticipate any problems? What you’ll need is a mortgage calculator to work out the math, so that you’re adequately prepared before going to see a lender.
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When trying to assess how much of a risk you are, two of the most important factor your lender will consider are your credit score and credit history. You should therefore have a look at your credit report before applying for the mortgage. Credit cards with high balances is the last thing your lender will want to see. So make sure you’ve paid of your debts, or at least tried to keep the balances low. It also helps when you have no outstanding loans, such as when financing a new car. Having good credit shows your lender that you’re capable of managing your finances well, which increases your chances of getting approved. Consider length of the loan This is definitely of one of the most important considerations. While a 15-year mortgage may be provided at lower interest rates, your monthly payments will be bigger than if the repayment period was stretched to 30 years. Taking a shorter-term mortgage would be a good idea if you can afford the large monthly payments. Having a stable job matters Having a stable job helps, as most lenders want to see that you’ve been in a certain job for a bit of time. So if you’re thinking about changing jobs, you may want to secure the mortgage first before you proceed. Many mortgage lenders only consider applicants who have been in their current jobs for at least 3 – 6 months. Remember that proof of income is one of the things they’ll need. This means obtaining the relevant documents from your employer. You might also be asked to provide your last three months’ pay slips and bank statements so the lender can have a look at how you’re earning and spending money.