Purchasing your first home in the absence of a good mortgage loan is liable to prove impossible. Regardless of where you happen to be based, a home represents an enormous investment – one many of us are unable to make without the aid of a manageable mortgage loan. That being the case, it’s in the best interest of every first-time homebuyer to wow mortgage lenders. So, if you’ll soon be submitting mortgage applications, it’s best to check out this mortgage rates chatanooga first and also make sure to put the following advice to good use.
Get Outstanding Debt Under Control
Large amounts of outstanding debt can be a huge hurdle for anyone looking to get approved for a mortgage loan. Many lenders are understandably hesitant to grant mortgage loans to applicants who are swimming in unpaid debt. If an applicant has consistently failed to settle past debts, how willing and/or able will they be to keep up with their monthly mortgage payments?
So, if you’ve allowed your credit card debt to get out of hand, it’s strongly recommended that you get a handle on it before proceeding to submit any mortgage loan applications. This may mean waiting a little longer to purchase your first home than you’d like, but a little patience on your end can pay off in a big way down the line. Additionally, once your outstanding debt has been successfully paid down, make sure to give your credit score a little bit of time to recover before you start submitting loan applications.
It’s also a good idea to abstain from making large purchases on credit when the application process is underway. So, unless you’re dealing with an emergency, it’s in your best interest to place a hold on such purchases until the process has been completed. If you simply can’t hold off on a large purchase, consider paying in cash (provided, of course, this is a viable option) or asking a friend or family member for a short-term loan.
Have a Reliable Source of Income
It’s easy to see why so many lenders value reliable sources of income. After all, in the absence of consistent income, most people would find themselves unable to keep up with monthly mortgage payments. As such, it’s strongly recommended that you avoid submitting mortgage loan applications during periods of unemployment. You should also avoid quitting your job while the application process is underway, especially if you don’t have another one immediately lined up.
If your income level doesn’t meet the standards of a certain lender, you may be able to win their favor with a dependable cosigner. Having a cosigner who meets all of a lender’s requirements can give them peace of mind and allow them to offer better local lending solutions.
Build Your Savings
The more money you have in the bank, the more impressed lenders are likely to be. For one thing, building your savings indicates a strong degree of financial responsibility and confirms that you have a consistent source of income. Robust savings also ensure that you won’t suddenly fall behind with mortgage payments should you get fired or decide to quit your job.
So, if you currently have little to no money in the bank, it’s recommended that you add to your savings in advance of submitting mortgage loan applications. Building your savings can lead to enhanced financial security, which can help your chances of loan approval. Furthermore, having a fair amount of money in the bank will leave you well-equipped to make a large down payment, which bring us to the next item on the list…
Make a Large Down Payment
Being willing to make a large down payment is among the most effective first time home buyer tips you can utilize. This will show lenders that you’re financially secure, responsible and serious about buying a home. As an added bonus, a large down payment often means lower monthly payments.
It’s in the best interest of all homebuyers to impress mortgage lenders. After all, these are the people who will ultimately determine whether you’re prepared to make the jump from renter to homeowner. So, if you’ll soon be submitting mortgage loan applications, it’s strongly recommended that you brush up on what lenders are looking for in applicants. Furthermore, in the interest of maximizing your chances of loan approval, put the pointers outlined above to good use.