If you’re contemplating about buying your first home, it is only important to do your homework and some thorough planning before finally taking the plunge. This is to avoid costly mistakes, as well as regret after closing the deal. This is especially true if you are financing the purchase with your first mortgage.
Here are few mortgage tips to consider:
Work with the right lender
Buying a home likely one of the biggest purchases you’ll make in your lifetime, so it’s important to work with a reliable lender. The right professional will walk you through the process and offer recommendations about the loan programs that suit your needs and finances.
Know how much you are willing to spend
Sometimes, the lender will present an amount that can let you afford a bigger home. Don’t be, however, blinded by numbers. It’s best to consider the 50/20/30 rule when deciding how much you’re willing to spend. This states that you should be allocating 50% of your income on recurring bills, 20% on general savings and down payment, and 30% on flexible spending.
As American Loans and other Salt Lake City lenders stated, a home mortgage calculator can be beneficial in estimating how much you may borrow, including your monthly payments, PMI, taxes, and other fees.
Gather Essential Documents
Before searching for potential homes, it’s ideal to have your documentation ready. This is essential when applying for a loan and determining whether you qualify for a mortgage. A pre-approval from your lender will also give you an edge in a competitive market, as this means that you’re serious about making a purchase. Here are the documents to gather when applying for a mortgage.
Limit your spending
During the process of getting a home loan, it’s best to save and avoid making large expenses. This also means preventing your credit balances from increasing and avoiding getting new lines of credit. Keep in mind that when being approved, the lender will evaluate your total financial situation.
Apart from the tips mentioned above, be reminded not to be caught up in making a decision immediately. Be sure that you take your time in making an educated decision. You can talk to your mortgage lender if you have any concerns about the loan process.