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4 Tips To Get Approved For A Mortgage
Buying a home is a milestone event, a major accomplishment in our lives. It’s one of the biggest (if not the biggest) financial decisions you’ll ever make, so it’s important to educate yourself before jumping straight in. To help you on your path to home ownership, we’ve put together 4 top tips to help you get approved for a mortgage.
- Check your credit report. Then, check it again.
One of the first items that’s reviewed when applying for a mortgage is your credit report. Depending on the loan program that fits best for your situation, you’ll be required to meet a certain minimum credit score to qualify. When looking over your report, it’s also important to review any collections items, verify their accuracy and work towards getting them removed (if any items are incorrect, you can put in a dispute).
- Save, save, save.
While many people are under the impression that you need to put 20% down in order to purchase a home, we have various programs that let you put down significantly less. However, the more money you save for a down payment, the less you’ll need to finance for your home.
In addition to your down payment, there are other fees (like closing costs) that will need to be covered. Pro tip: Look over your budget, determine how much you can put aside every paycheck and create a separate account to store the money you’ll use towards purchasing a home.
- Pay Down Debt, Avoid New Debt.
Besides your credit score, lenders look at your debt-to income ratio (DTI) when determining your approval odds. While you don’t need to be debt-free to qualify for a mortgage (many lenders actually prefer you have some debt to show you’re able to stay on top of monthly payments), you’re most likely to be approved when your DTI falls below 43%. While you’re focusing on paying down your accounts, try to limit adding new debt and avoid making any large purchases (*this includes co-signing for another individual*).
- Know What You Can Afford.
The best way to know what you can afford is getting your mortgage pre-approval. By taking action early on in your home search with a pre-approval, you can find out exactly how much home you qualify for. That way, when you find the home, you can jump on it and put an offer in (there’s nothing worse than losing the perfect home to someone else just because you didn’t take the time to prepare yourself).
Interested in finding out how much home you qualify for today? All it takes is 60 seconds to get started on the form on the right, or give us a call at (407) 330-7566. We look forward to helping you on your home journey🏡!