Buying a home requires you to do more than decide you are ready to purchase a home. You need to make sure you are really ready for the process of buying a home.
Understand How Your Credit Score Will Impact Your Future
You need to really understand how your credit score will impact your future. The higher your credit score, generally the lower the interest rate you are going to pay on the loan. A lower interest rate, when it comes to purchasing a home, can really make a huge difference.
A lower interest rate can save you tens of thousands of dollars over the life of your loan. That is why it is important to understand the implications of your credit score. If your credit score is below 750, you should seriously evaluate what you can do to improve your credit score and if you can wait to purchase a home while you take the time to improve your credit score.
A lower credit score can cost you tens of thousands of dollars over the lifetime of the loan. It has long-term implications, so if there are actions you can take over a six-month period to raise your credit score, such as paying off credit cards or paying down other loans, it is worth delaying the home-buying process while you undergo that process.
Start Getting Your Documents Ready
When it comes to getting a mortgage, be prepared for the mortgage loan officers to ask for a lot of documents. Anything that you say or claim you are going to need to back up with documentation. It can take more time and effort to find that documentation, depending on how you keep track of your financial information. In addition to finding all that information, your mortgage officer is going to want that information digitally, so you will also need to either scan and email or fax that information to them.
Start by gathering together basic financial information, such as your tax returns for the last three years, your pay stubs for the last year, your W-2 forms for the last few years, a copy of your driver's license, and your actual Social Security card. From there, start to dig deeper. Get bank statements, brokerage statements, and retirement account statements. Be prepared to show evidence of all of your assets, as well as all of your debt, to the mortgage company.
When it comes to purchasing your first home, be smart about the process. Check out your credit score, and give yourself time now to raise your credit score in order to save thousands of dollars down the road. Before starting the loan application process, spend time getting together digital copies that demonstrate all of your finances and earnings. Improving your credit score and preparing your financial documents will make the actual process of applying for a loan go smoother and help you get the results you want. For more information about mortgage loans, reach out to a company like Sharefax Credit Union.Share