Buying a home is a major step in most people’s lives, and one that should be well prepared for. If you’re a first time home buyer, you have quite a journey ahead of you. While the process of searching for that perfect home will be exciting, you need to make sure you’re adequately prepared to take out mortgage before making the commitment to such a big loan. You can find out more about mortgages from a property adviser or just by doing some research online. Here are some tips to help first-time buyers prepare for a mortgage:
Make Sure You Have a Stable Income
A stable income is an absolute must before you will be ready to take out a mortgage. A mortgage involves making significant payments for many years, so you must have a stable job and income to cover those. If you lose your job, guess what? Those payments will keep on coming or you’ll lose your house. Find that job with stable income and you’ll be set for a mortgage.
Raise Your Credit Score
These days, credit score is super important to get a mortgage. The bank will only loan you this huge chunk of money if you can prove to them that you have an excellent history of paying back your loans. If you’ve got lots of outstanding credit card debt and other kinds of debt that are paid off late, you’re not going to get a mortgage.
Don’t Borrow More Than You Can Afford
Basically, live within your means. Look at your income and figure out realistically what kinds of payments you can make on a mortgage each month. Select a home and mortgage rate that will pair wisely with your standard of living. The lower your borrowing rate, the better- check out the next step to find out how to lower your payments each month.
Put More Money Down
The more money you can put down on a house straight up, the lower your monthly payments will be. Your mortgage will be smaller and you’ll be in less debt! Also, the more money you put down right away, the lower your credit score can be to get that mortgage. So if you haven’t got impeccable credit, you’ll really want to look at putting some money down.
Pay Off Your Other Debts
Before taking on the commitment of a mortgage, you really want to square away your other debts, or at least get them under good control. These include student loans, car payments, credit cards or anything else you are in debt for. If you’re still swamped with these bills, it might not be the right time to take out a mortgage.