Best Mortgage Tips for the First-Time Homebuyer Taking a mortgage is no doubt a major commitment. It’s therefore important that you find the best deal possible if you are a first time home buyer. To get approved and qualify for a decent rate, you will need to be in good shape, financially speaking. This means there are a number of things you must be aware of before arranging the mortgage. Below are a few tips to help you get the best possible deal: Have a financial plan It’s important to take a bit of time to plan your finances before applying for the mortgage. To begin with, consider whether you’ll be able to afford paying back the amount you’re borrowing.To begin with consider whether you’re going to afford to pay back the amount you want to borrow. Next, you’ll need to be sure that the amount you borrow will be enough to purchase the property, with some spare left to cover associated costs. Do you anticipate any problems with your monthly repayments? What you’ll need is a mortgage calculator to work out the math, so that you’re adequately prepared before going to see a lender.
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Your credit score and credit history are among the factors your lender will consider when assessing how much of a risk you are. You should therefore have a look at your credit report before applying for the mortgage. The last thing your lender wants to see is credit cards with high balances. So be sure to pay off your debts, or at least have these balances at a minimum. It’s also helps if you don’t have any outstanding loans, such as financing a new car, at the time of your application. Having good credit is a demonstration to the lender of your ability to manage your finances well, and that increases your chances of getting approval. Loan term This is definitely of one of the most important considerations. While a 15-year loan may come at a lower interest rate, the monthly payments will be higher than if the repayment period was stretched over another 15 years. Taking a shorter-term mortgage would be a good idea if you can afford the large monthly payments. Job stability is important It helps if you have a stable job, because most lenders need to see that you have been in a certain job for a good amount of time. So if you’re thinking of switching jobs, you’ll want to secure the mortgage first before you go ahead. Many lenders only consider those who’ve been in their current jobs for at least three to six months. Remember that one of the things they’ll need is proof of income. That means getting the relevant documents from your employer. You might also be asked to provide your last three months’ pay slips and bank statements so the lender can have a look at how you’re earning and spending money.