Each year, 7.3 million mortgages are taken out in the USA.
Buying your own home and can feel like a real accomplishment. It can be a little overwhelming when looking for a mortgage with so many choices around.
Don’t worry! Read on for our 10 tips on what to look out for to ensure you get the best mortgage for you.
1. Build Your Deposit
Providers like larger deposits. The larger your deposit, the more likely you are to get the lowest interest rates.
If you can only put down a 10% deposit you’ll likely end up paying a higher rate.
2. Update Your Address
Lenders will need to verify your identity before approving a mortgage. Rejection could happen if you aren’t registered everywhere at your current address. Make sure you register with your current address before applying.
3. Tidy Up Your Finances
Lenders will look at the total amount of credit available to you and how much you owe. Clear as much of your debt as possible before applying, and close down all accounts you don’t use. If not, lenders could worry about your ability to keep up with repayments.
4. Build Your Credit Score
To qualify for the best mortgage offers, you will need a good credit score. Make sure to check yours before applying and work to improve it. This means you can avoid surprises and have time to correct any inaccuracies that crop up.
5. Avoid Strange Properties
Lenders like to know they can get their money back if you happen to default. This means they are less willing to lend against “unusual” properties as they could be harder to sell on. Homes built with unconventional methods or materials are an example.
6. Be Paperwork-Prepared
A lender will have a few checks to do, so make sure you have all your documents ready. This includes a recent official letter to prove your address. They will need bank statements, tax returns, and recent payslips.
7. Don’t Change Your Application
Once you’ve started, don’t change your application as this can cause delays. There is no guarantee the lender will agree to the extra money. It could even put them off lending at all!
8. Go Slow, Act Fast
Take your time picking the home that is right for you and your needs. Moving is costly, and you’ll want to see your investment grow over time.
When you find that perfect home, don’t wait around. You’ll need to be fast in a competitive market.
9. Know Mortgage Types
There are lots of different mortgage types. You need to think if you want the security of a fixed rate or a variable deal. The former locks you in for the whole term. The latter won’t tie you in, and could start cheaper, but will rise with the base rate.
10. Shop Around
Once you know the type, next you want to make sure to get the best deal available to you. Make sure to shop around. Finding the cheapest deal could save you tens of thousands of dollars over a 25-year period.
What to Do When Looking for a Mortgage
If you follow our tips, looking for a mortgage will be painless. Arm yourself with the documentation your lender needs and know what you are looking for.
If you are looking to apply for a mortgage, request a quote from us. We strive to deliver the best product and service in Indiana.