Buying a home is a big decision and a big commitment. Even with first time home buyer programs, there is still a lot to learn about home mortgages. By getting the facts about your credit and purchasing capabilities, you can make the best home buying decision for you.
Questions to Consider When Applying for a Mortgage
What will you need for a down payment?
Three to twenty percent of the purchase price is typical. The actual amount depends on what type of loan you apply for.
How will you know if you qualify to make the monthly payments?
Several factors are taken into consideration when a bank determines if you qualify. One is your debt-to-income ratio, or in other words, your total monthly payments divided by your gross monthly income.
What about your credit history?
Your credit history is a major factor in qualifying for a mortgage. You can check your credit report before applying for a mortgage, and carefully review your report to ensure it accurately reflects your credit history.
How to Maintain a Good Credit History
- Pay your bills on time
- Keep balances low on credit cards
- Pay off debt, rather than moving it between credit cards
- Check your credit report annually for accuracy
- Ask your local lender for advice to get you started on home ownership