Many people don’t know what they need to do in order to get a mortgage. Here’s some info you may find helpful.
First – this is what you’ll need:
Down payment.
You’ll need cash to make your down payment. The amount needed is generally between 3% of the purchase price to 20%. But of course, you can put down more, as it will reduce the amount borrowed and the monthly payments. If you have less than a 20% down payment, you will increase your monthly costs in order to pay the necessary mortgage insurance. If you are eligible for Veteran Administration loan, you can purchase the home with zero down and you won’t pay mortgage insurance. But there is a sizable funding fee, this can be rolled into the loan amount.
Documentation.
The mortgage processors will verify your income, They will access your credit report. They will request copies of your recent tax returns, bank statements and any investment accounts.
Property Appraisal.
The lender will order an appraisal on the property. If the amount you wish to finance exceeds the appraiser’s valuation of the property, the mortgage will not be approved. So listen to your Realtor as to the value of the property and don’t get caught up in overpaying for the property.
Stable Income and Employment History.
You’ll need to show that while you have a job, you also have a history of keeping a job. If you have recently changed jobs, but stay in the same field, you should be okay. But if you recently made a total career change, you may not qualify for a mortgage at this time.
A Good Credit History.
The lender will look at your credit report. If your credit score is low, you either not get approved for a mortgage, or you may end up paying a higher interest rate. Protect your credit and show you are a good credit risk.