Lessons Learned from Years with Tips

Why Debt Consolidation Is a Good Idea

It is possible to have a difficult time trying to figure out how to get a mortgage when considering getting your own property. The major housing crisis that occurred a couple of years ago has made the lenders become strict on the people they now give loans to.

Knowing the debt obligations you have every month is the first thing for you to do. Documenting your monthly income and the debts you are to pay is something you need to do when preparing to apply for a mortgage. 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. You will get limitations to the limit the loan can be approved for if you have large debts to pay. 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. It is good to ensure that your report does not have late payments or any negative remarks. When you have a low credit score, it will be vital for you to have a cosigner who is qualified. You can also choose to wait until you have improved your credit score before you get the mortgage. Avoid getting new credit several months before making a mortgage application.

Additionally, you will need to determine the budget for getting the mortgage. Before you can go to the lender, you should decide the amount you can afford comfortably for a house. You should add your full housing payment with the taxes and the insurance. You should ensure the total amount is not more than 35% of your gross income. Getting property not more than 25% of your gross income is the best thing for you to do.

You will also need to decide the amount you need to save for a down payment. After you look at your credit and determined the budget you will work with, the next step will be to work on your down payment. Be aware that the real estate agents are there to convince you on getting more house than what you actually need. You may also find that you are facing the temptation on your own. 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.