Purchasing a house is a big responsibility and for most people it represents the largest investment of their lifetime. There are several steps you can take now to ensure things go as smoothly as possible on closing day. As a first step, the United States Department of Housing and Urban Development (HUD) recommends that you sit down with your spouse, partner, or another person you intend to purchase a house with and determine how much you can afford. Most financial experts agree that your monthly mortgage payment should not be more than 30 percent of your take-home pay.
Your Credit
Mortgage companies base lending decisions on many factors, including your income, job stability, rental history, and credit worthiness. Since your credit report plays a large role in whether or not you are approved for a loan, it is essential to ensure that the information it contains is accurate. Every consumer is entitled to a free credit report from Transunion, Experian, and Equifax once per year. These are the three major credit reporting agencies. You should consider getting your free report from each of them because one may have information that the other two do not have. You have the right to challenge any inaccurate information that you find.
There are many websites out there claiming to offer free credit reports that actually require you to pay and try to convince you to sign up for additional services at the same time. The website linked here is the only legitimate one where you can get your credit report for no charge.
Find a Qualified Mortgage Banker
Once you have determined your budget and reviewed your credit report, it’s time to look for a mortgage banker to help you through the rest of the process. According to Marquee Mortgage, an experienced mortgage provider in Anthem, Arizona look for a company with an outstanding reputation for customer service that is a well-known member of the community. The mortgage banker you choose to work with should go over several different loan types with you to determine which one works best with your budget and housing needs. He or she can also advise you on how much you need for a down payment and help you find the lowest possible interest rate.
Apply for Pre-Qualification
This is an important step in the process because it gives you a budget for house shopping. However, you need to provide all of the documentation that your mortgage banker requires so he or she can give you an accurate figure. This typically includes two or more recent paystubs, tax returns from the past two years, employment verification, an explanation of any blemishes on your credit report, and an explanation for any part of the down payment you received as a gift.
Search for a Real Estate Agent
When you know the amount of loan that you qualify for, you are ready to hire a real estate agent and start looking at houses. Most real estate agents work on commission so you don’t have to pay anything upfront. You can use the Internet to look for homes that interest you and ask your agent to schedule an appointment for a showing .Your agent can also search for properties on your behalf. When you find the right house, let your agent know how much you want to offer for it and he or she will work with the seller’s agent to negotiate a final price.
