8 Simple Mortgage Tips
1. Start Saving Now
As soon as you know you want to buy a home, start saving. It’s a myth that you need 20% put aside. Down payments typically range from no money down to 5%.Your lender can also discuss family gifts, grant programs, and additional loan incentives.
2. Organize Your Paperwork
On your first visit, ask your lender for a list of documents required during the mortgage process. The quicker you deliver these items, the faster the process will go. Many delays in the buying process can be avoided with timely paperwork.
3. Crunch the Numbers
Use a mortgage amortization table or online tools to calculate your estimated monthly expenses. Download your lender’s mobile app or visit their website to use a mortgage calculator that helps you predict monthly payments.
4. Compare Loan Options
Your lender should explain all the lending products that you may qualify for and offer a comparison chart for you. Not all mortgages are the same. Terms, rates and down payments vary.
5. Get Pre-Approved, Not Pre-Qualified
Don’t get pre-qualified for a mortgage, get pre-approved. Sellers and their agents often look for, or require, pre-approvals to accompany offers. This shows that a lender has reviewed your financial information and is likely to grant your home loan.
6. Don't Max Out
Don’t max out your credit cards, close old accounts, consolidate debt, pay off collections, buy new furniture, get a new car, co-sign on any loans, or have your credit pulled multiple times without speaking to your lender first. Once under contract, the golden rule is don’t spend money on anything that is not a true necessity and pay your bills on time.
7. Don't Quit Your Job
Be careful not to make any sudden moves at work. Don’t quit your job while applying for or under contract. A change in employment can affect your loan qualification. Stay put until after you close on the deal.
8. Avoid Large Deposits
Don’t make untraceable or explainable deposits into your bank account. Ask your lender before making any unusual deposits, as these can lead to your loan being delayed or denied.