Why Debt Consolidation Is a Good Idea
When you are thinking of leaving the renting field and getting a house of your own, you may have a difficult time knowing how to get a mortgage. Lenders have now become strict on who they approve to get the loans due to the housing crisis that happened several years ago.
Knowing the debt obligations you have every month is the first thing for you to do. Take the time to document all the debt payments and your monthly income. Your lender will ask you to provide two weeks of pay stubs for them to verify your income. The whole process will be harder if you have more than two sources of income or if you are self-employed. You can only get the mortgage approved once the lender is sure you can make the payments. If you are to pay for large debts, then you will be approved for only a small mortgage. The best thing for you to do is pay these debts off before you can apply for the mortgage.
Another thing that you need to do is check the health of the credit. You need to have a copy of your credit history and your recent credit score. Ensure your report does not have any errors or negative marks like making late payments. You will require to have a qualified cosigner if your credit score is low. You can also choose to wait until you have improved your credit score before you get the mortgage. Keep away from applying for new credit some months before applying for the mortgage.
Additionally, you will need to determine the budget for getting the mortgage. It is important for you to know how much house you can afford comfortably before you meet with the lender. Add together the amount for the house together with the insurance and the tax. After adding this, the amount you get needs to be less than 35% the amount you are getting for your income. Your safest bet is getting a house that does not exceed 25% of your income.
It is also good to decide the amount you will save for a down payment. When you have analyzed the credit and worked on your budget, you will then need to work ion your down payment. Be aware that the real estate agents are there to convince you on getting more house than what you actually need. In some situations, the temptation to do this can come to you all by yourself. However, the best thing for you is to stick by the payment you are sure you can afford when in a good financial state and a bad financial state.