Why Debt Consolidation Is a Good Idea
When you are thinking of getting a house, you are likely going to not know what to do to get a mortgage. Due to the housing crisis that occurred, the lenders are now strict with who they approve for this loan.
You can begin by having knowledge on the monthly obligations you have. Documenting your monthly income and the debts you are to pay is something you need to do when preparing to apply for a mortgage. For the lender to verify the income you get, they will ask for two weeks of pay stubs. The whole process will be harder if you have more than two sources of income or if you are self-employed. The lender will need to determine if you can pay the mortgage payment before they approve it. You will get limitations to the limit the loan can be approved for if you have large debts to pay. It is best that you pay off these debts before you can apply for this loan.
Another thing that you need to do is check the health of the credit. You need to have a copy of your credit history and your recent credit score. It is good to ensure that your report does not have late payments or any negative remarks. You will require to have a qualified cosigner if your credit score is low. You also have the option of waiting for your credit score to increase before you get the mortgage. Before you choose to apply for the mortgage, it is best for you to stay several months without applying for new credit.
It is also crucial for you to make the decision on the mortgage budget. Before you can go to the lender, you should decide the amount you can afford comfortably for a house. You should add your full housing payment with the taxes and the insurance. After adding this, the amount you get needs to be less than 35% the amount you are getting for your income. You should aim at getting a house payment that is not more than 25% of your gross income.
You will also need to decide the amount you need to save for a down payment. When you have analyzed the credit and worked on your budget, you will then need to work ion your down payment. You should know that the real estate agents tend to encourage you on getting the property that is more costly than what you can afford. You may also find that you are facing the temptation on your own. You should make sure you only go for the payment you will manage to pay when your financial state is either good or bad.