Steps to Prep for a Mortgage
Buying a home is exciting, but you must make sure you have all your ducks in a row before undertaking such a big financial move. The more you plan, the better off you’ll be. If you are unsure about what the home buying process will look like, our Home Buying Process document can help you feel confident throughout your whole journey. Here are some steps to take that will prepare your finances for a mortgage.
Raise Your Score
One of the most important things to do before applying for a mortgage is to make sure your credit score is as high as possible. The higher your score, the lower your interest rate will be. That is a big deal, as it makes paying your mortgage manageable. The best way to improve your credit score is to pay bills on time, every time.
Check Your Report
You should also check your credit report for inaccuracies. Incorrect information on your credit report could negatively impact your score. Go through your report and look for errors, then report them to the bureau immediately. Make sure that you check your report with all three credit bureaus — Experian, Equifax, and TransUnion. You can get daily updates of your credit score with our free credit monitoring tool in Mobile & Online Banking!
Gather Savings
The bigger down payment you make the more affordable your mortgage will be over time. A large down payment typically means you’ll have lower monthly payments. You’ll also have an advantage over other potential buyers, as a large down payment signals to sellers that you mean business. A good rule of thumb for a down payment on a house is about 20 percent. In addition to the down payment, you’ll also want to save for closing costs and the ongoing cost of homeownership. The more you save, the easier it will be to handle mortgage payments.
Prepare Your Documents
Having the right documentation can make the process of buying a home much easier. The loan officer will require financial documentation throughout the loan approval process. Our Home Buying Document Checklist can help make sure you are prepared. The best way to stay organized is to mark off the documents as you submit them to make sure you stay on track during your home buying process.
*Content provided by SavvyMoney - https://education.savvymoney.com/debt/what-to-do-before-applying-for-a-mortgage/
