What is a Mortgage?
The word “mortgage” refers to a type of loan used to buy or keep a house, land, or other pieces of real estate. In other words, a mortgage is a loan taken to acquire any form of real estate and is to be repaid within a timeline agreed between the borrower (you) and the lender (bank, etc.)
Before your house hunting, it’s in your best interest to know how much you can conveniently spare for the house. This saves time at the end of the day by preventing applicants from wasting time applying for a loan they would probably be denied and trying to bid on homes that are not available.
Tips on being Qualified for mortgages
Researching which banks are most ideal in determining your suitability might prove to be a piece of beneficial information that you need before you even start looking for a home; there would be many institutions that fit this criterion. One of such would be crefco.
You should try considering factors such as insurance and tax, among other expenses, when you are trying to figure out what type of payment you can afford.
Generally, lenders don’t usually fancy borrowers with existing monthly payments that are more than twenty-eight percent to forty-four percent of their monthly income.
So it is advisable to make sure you don’t have other heavy expenses you are paying for before applying for a mortgage loan, as this might scare them away from lending you the money.
To qualify for a mortgage, buyers applying for the first time must show that they have had consistent employment for at least the past two years. Though it remains possible to be qualified even with the experience of fewer than two years.
Homebuyers also need to pay keen attention to their credit records, as an excellent credit score would boost the lender’s confidence in your ability to pay back without hassle. It would also help research a couple of home loan programs for first-time buyers.
These programs have less strict eligibility guidelines to accommodate borrowers with lower household income, credit scores, or down payments.
How Can I Improve My Credit Score?
Below are some tips on how your credit records can be improved:
- Put a call through to your Bank card provider requesting an increment on your credit limit.
- Endeavour to Keep your balance lower than 30 percent of your permissible credit limitation.
- Perchance you find that you cannot promptly sort out a bill, you should contact your bank card provider and request a payment deferral, so you are spared from a bad credit report.
This will help ensure you have good credit history before proceeding with your mortgage application. Please ensure to move around a lot and make lots of inquiries, whether you are a first-timer or not; you just might be lucky to find lenders who are willing to be flexible with their procedures.
Conclusion
In conclusion, we understand how applying for a mortgage the first time can seem scary, but not to worry, as others have gone through this step before you, and some lenders have made their policies more flexible for first-timers to apply. All you have to do is plan and take the first step.
