If you’re planning to buy a home for the first time, there are certain things you can do to improve your chances of getting a bank to approve your mortgage. Even though they may seem like small things, combined they can help to improve your chances quite a bit. Mortgage lenders are looking to get a whole picture of financial stability before they agree to give you a mortgage, so they will be looking at several aspects of your finances throughout the application process. Here are some ways you can improve just a few of the things they will inquire about:
Stay at Your Current Job
You might not be working at your dream job, but hanging on where you are can benefit your mortgage application in multiple ways. Lenders will be looking for a stable income coming in to your household, so the longer you’ve been at the same job, the better you’ll look. Even if you haven’t been at your job for a long time, make sure you don’t transition away from it during the months right before you apply. If you don’t have any choice about leaving a job right before
Start Saving Whatever You Can
Even if you’re planning to get help with your down payment through a program for first time homebuyers, you’ll still need to have some money saved up for moving, closing costs, appraisals, and other expenses that will come up during the purchasing process. Plus, your lender will look to see how long you’ve had savings for to try and assess how stable you are. Even if you cant save much, make a small start by saving ten percent from each paycheck.
Monitor Your Credit Score
Your credit score will make a big difference in whether or not you get approved for a mortgage, as well as the rate the bank gives you. A better rate can mean a lower monthly payment for the next twenty years, so it can make a significant difference in your finances for a long time. Its well worth paying off any items you can to improve your score.
Reduce Your Debts
Part of improving your credit score is reducing any debts that you have to improve your debt to income ratio. Some of the things you may want to pay down include:
- Student loans
- Credit cards
- Personal loans
- Store cards
- Car loans
While paying off the total balance may be outside your reach, you can almost certainly afford an extra ten or fifteen dollars above the minimum payment to help decrease the balance over time.
If you’re ready to purchase your first home, the Core Group can help. Contact us today to start looking at the homes we have available in Orlando and the surrounding areas.