Top Mortgage Tips for First-Time Home Buyers Arranging a mortgage certainly is a big commitment. If you’re a first-time home buyer, therefore, it’s important that you find the best deal available. To get approved and qualify for a decent rate, you will need to be in good shape, financially speaking. This means that before you arrange for the mortgage, there are several things you should be aware of. Here are some tips that can help you secure the best mortgage possible: Budget It’s vital that you take time to budget before you apply for a mortgage. First off, consider whether you can afford to pay back the amount you’re borrowing. Next, you’ll want to make sure that the amount you’re borrowing will be enough to cover the purchase of the property as well as the associated fees. 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. Before you apply for the mortgage, therefore, you’ll want to take a look at your credit report. 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’s also helps if you don’t have any outstanding loans, such as financing a new car, at the time of your application. Having good credit is a demonstration to the lender of your ability to manage your finances well, and that increases your chances of getting approval. Length of loan This is no doubt one of the top considerations. While you may get a lower interest rate with a 15-year mortgage, the monthly payments will be bigger than having the repayment period stretched over 15 more years. Taking a shorter-term loan would make sense if you can afford the large payments. Job stability matters Since most lenders need to see that you’ve been in a certain job for some time, having a stable job helps. So if you’re considering switching jobs, you may want to secure the mortgage first before going ahead. Many lenders only consider those who’ve been in their current jobs for at least three to six months. Remember that one of the things they’ll need is proof of income. That means getting the relevant documents from your employer. You may also need to provide pay slips and bank statements for the last three months, so they can have a look at your earning and spending patterns.

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