February 12, 2018 | Barb Huntley

Submitting a mortgage application is something you want to do right the first time. Don’t go through all that work to find out you have to re-submit. While you can’t instantly change your income or credit history you can change WHEN you apply for a mortgage in hopes of getting a more favorable loan. Go through our list before you start the paperwork.

1.Check Your Credit Report – Lenders will be checking your credit reports so you should too. If it is much worse than you expected, maybe now is not the time to buy. Instead, spend the next 6 to 12 months improving your credit so you can qualify for a more favorable mortgage.

2.Pay Off Debt – Lenders don’t want to lend to those who are spending a majority of their income paying off debt. Before you apply for a mortgage get your debt (more) under control. Start by paying off credit card debt (which will also improve your credit score), car loans and keep chipping away at school loans. Prioritizing paying off debt will increase your financial health and look better to lending institutions.

3.Know Your Spending Limits – Now that you know your credit history and the status of your debt, it’s time to decide your spending limits. Figure out how much you can afford to pay towards your monthly mortgage payment. Remember owning a home will also include the costs of homeowner’s insurance, property taxes, utilities and maintenance. These costs will be added to any month loans you are paying off.

4.Know What You Need –Most lenders want the same type of information prior to approving a loan. This information typically includes a month of your most recent pay stubs from any buyer who will be listed on the loan, along with your most recent two years’ worth of tax filings. Also, be ready to provide at least three months of bank statements. This is not a mandatory requirement of all lenders, but many could ask for this information.


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