How do you successfully apply for a mortgage? What do lenders look for? We get it – it can feel like a new world. Whether you’ve done it before or not, here are a few tips on how to set yourself up to be a great candidate!
- Keep money in the bank. Basically, lenders want to see that you’ll be able to make your mortgage payment – which includes having the savings to handle home ownership when something inevitably pops up.
- Have a solid down payment. It’s best to have your down payment in one account for about a month before you apply for a mortgage. This goes with the first point – lenders want to see that you can handle the payment.
- Rock what you got. One mistake people make is taking a loan they can’t actually afford, thinking their income will increase over time. It’s best to apply based on what you can afford now, instead of relying on a possibility.
- Understand Debt-to-Income Ratio. If you’d like to figure out your DTI, we have a very helpful guide here.
- Avoid big purchases. You can help your debt-to-income ratio stay stable by avoiding things like large purchases or co-signing another person’s loan. Even if you’re not making payments, it will increase your DTI and may change what a lender is willing to offer you.
- Watch your credit. Avoid opening a lot of new cards – even department store credit cards will show up on your credit report as a hard pull on your credit. At the same time, don’t panic and close a bunch of cards at once – you should be using less than 30% of your available credit, so make sure closing one or two doesn’t put you over that percentage.
By following a few simple tips, we’re confident you’ll be set up for success! If you have any questions about applying for a mortgage, give us a call! We’re a Christian Mortgage Lender, and we think we value the same things you do – faith and family. We’d love to help you.
The Christian Mortgage Mom