Homeownership is a highly desired milestone for most people today. Becoming a homeowner involves sweat and tears when it comes to finances. Unfortunately, not many people can afford, out of their paycheck, to become homeowners by either buying or constructing their first home. Thanks to various mortgage financing solutions in the market today, aspiring homeowners can realize their dream. One of these solutions is the option of securing a mortgage. Here is what it takes to get approved for your first mortgage application.
Have a good credit score
The primary requirement before any financial institution issues you with a good mortgage is to ensure that you have a healthy credit score. The processors of your mortgage also look at your credit history to determine how much you have transacted before. To increase your chances of succeeding in this endeavor, you may want to ensure that you have a good history of no late payments.
Your credit score should also be somewhere between 680 and above to increase your chances of succeeding. Checking your credit score often gives you an opportunity to improve gradually in order to build momentum for your first mortgage application.
Come up with a mortgage budget plan
Sometimes, financial institutions may require seeing and evaluating your mortgage budget plan before they approve your application. Creating a mortgage budget plan comprising of a comprehensive breakdown of how you intend to use the money helps convince the service provider of your integrity. Most importantly, the plan ensures that you get organized to achieve your homeownership dream quickly.
Get a good down payment
Virtually all mortgage service providers require you to offer a certain amount of down payment of at least 10percent. Only special loan programs allow individuals to successful benefit from mortgage services without a down payment. The higher your down payment, the better your chances of success while also easing the burden of mortgage repayment.
Lastly, it is important to consider evaluating whether, with your current financial status and profile, you can successfully apply for a mortgage. Using an online mortgage pre-qualification calculator allows you to key in some specific financial information, such as your credit score, employment status, down payment, loan repayment duration, and home insurance costs to determine the amount of mortgage you stand to qualify for.