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4 Important Mortgage Tips for the First-Time Home Buyer

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’s a look at a few tips that should help you secure the best deal possible.

Have a financial plan

Before you apply for the mortgage, it’s vital that you take a bit of time budgeting. 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. Do you expect to have any problems with the monthly repayments. You’ll need a mortgage calculator to work out the numbers so you can be adequately prepared before approaching a lender.
The Beginner’s Guide to Mortgages

Clean up your credit
Smart Tips For Finding Lenders

Two of the biggest factors your lender will consider when determining how much of a risk you are are your credit history and credit score. You should therefore have a look at your credit report before applying for the mortgage. The last thing your lender wants to see is credit cards with high balances. So be sure to pay off your debts, or at least have these balances at a minimum. 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 certainly is one of the topmost considerations. While a 15-year loan may come at a lower interest rate, the monthly payments will be higher than if the repayment period was stretched over another 15 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 thinking of switching jobs, you’ll want to secure the mortgage first before you go ahead. Many lenders only consider those who’ve been in their current jobs for at least three to six months. Keep in mind that one of the things they will require is proof of income. This means obtaining 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.