Many potential home buyers in today’s market are unfamiliar with one of the key components to purchasing a home, the mortgage process. This unfamiliarity can make some home buyers hesitant to obtain a mortgage and purchase a home. Learning about mortgages, what it takes to qualify and how you can obtain one will take a lot of stress out of the process.
There are a few different things you’ll need to qualify for a mortgage in today’s market. First, you’ll need a down payment for your home; this is typically anywhere from 5% to 20% and depends on what type of loan you get. If you qualify for a VA loan, there is no down payment required for homeowners. You’ll also need to provide documents to verify your income, credit history and any other assets you may have. This is where having good credit history and a stable income come in handy as they can affect the required down payment and mortgage rate that you’ll receive. The home you’re intending to purchase will need to be appraised to ensure that the amount of the loan you’re receiving is appropriate for the home that you’re purchasing.
Once you’ve familiarized yourself with the mortgage process there are a few different steps you need to take to get approved. You’ll want to be aware of your current credit score and history so as to not be surprised by anything that may come your way throughout the duration of the application process. As previously mentioned, you’ll also need to compile certain documentation such as W-2s, tax returns, bank statements and any other documents that may verify income or expenses that you have on a regular basis. You may already have a budget in mind and know how much you can afford, but if not, it is a good idea to speak to a lender or other professional to help you determine what your price point is and whether you will qualify for a loan of that amount. Lastly, many lenders and realtors suggest getting pre-approved for your mortgage; when you put in an offer on a home it shows the seller that you are a serious buyer as well as reassures all parties involved that you are qualified for a certain loan amount.
If applying for a mortgage is one of the main reasons you have yet to purchase a home, there’s really not anything to be afraid of. The important thing to remember is that you want to be aware of your credit history and how much you can afford as well as always consult with a professional if you have any questions or concerns.