If you’ve got your sights set on buying a house this coming spring, consider spending time now focusing on a few things that will help expedite the process later when you’re ready to make your search official. Since the majority of people will need a mortgage loan to make their dreams a reality, I’ve asked Russ Fitch from Simmons Bank to send us a few tips to consider.
A mortgage loan has very specific requirements, and if you will do some prepping before finding that perfect home, it can save you much stress. Follow these steps to improve your likelihood of an approval:
1. Budget – The lender will review your pre-tax income to determine if you can “afford” the loan. Take a look at your monthly payments and your income, and then determine the best housing payment for YOUR budget. Mortgage Originators are not financial planners and they follow the guidelines for loan approval. Sometimes, this means that a buyer can “afford” more than they want to spend. It is up to the borrower to determine their personal maximum payment and commit to staying at or below that amount.
2. Save – Most loans require a down payment, and there are closing costs associated with loans. Save at least 6% of your desired purchase price for the down payment and other related costs.
3. Check Your Credit – Once you have saved money for a down payment and determined the maximum mortgage payment for your budget, now it is time to check your credit. This frequently involves getting “prequalified” by a loan professional. Your credit score can make a big difference in the interest rate and terms that are offered to you.
4. Gather Your Documents – Loan guidelines require ample support documentation for getting the loan approved. Be ready to supply documents to the lender, such as the most recent pay stubs, the last two years of W-2’s and taxes, bank statements, and forms of identification.
Once you have completed these four steps, you will be much more likely and ready to move forward with buying a home!
Mortgage originator/Simmons Bank/ NMLS #478716
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Jarod Tanksley 615.403.8265
Brentview Realty 615.373.2814