6 Tips for Applying for a Mortgage
When you decide the time is right to buy a home, there are a few things to consider when you apply for a mortgage to purchase a new property. Here at the Knoxville movers, we want to help you navigate the process with ease, so we have outlined six key steps in the mortgage application process that you should be familiar with. Read on to learn more!
Get your credit score in order. One of the most influential factors in your mortgage application is your credit score. A mortgage determines your borrowing liability, so how you have managed debt in the past is a strong indicator of how you will likely manage it in the future. Have a low credit score but want to buy right now? You will likely be required to make a bigger down payment on the home you wish to purchase.
Get familiar with your loan options. Making a larger down payment will spare you the financial burden of paying a private financial institution for a home mortgage loan. If the larger down payment isn’t an option for you, no fear, you might qualify for an FHA backed loan which allows for a minimal down payment (under 4 percent) though you may be susceptible to additional fees like mortgage insurance expenses.
Make a larger down payment. If you can afford to put down more up front on a home purchase, then do it. You can look into the conforming loans that require borrowers to make a 5 percent down payment and you would not be locked in to the mortgage lender—though you would have to pay private mortgage insurance. Mortgage insurance can be cancelled, however, when the loan to value hits 78 percent.
Wait until the time is right. Getting a home loan is similar to financing a car purchase. There is room for negotiation and some buying times are more deal-friendly than others. If your finances and credit score are less than desirable, then you need to boost your odds on getting a better home mortgage loan by making a down payment of 20 percent.
Compare! See what competing lenders can offer you. Like financing a car, different lenders will compete for your business. Don’t lock yourself into a specific lender until you are confident you are getting the best deal for you.