Why Debt Consolidation Is a Good Idea
When you are thinking of leaving the renting field and getting a house of your own, you may have a difficult time knowing how to get a mortgage. The major housing crisis that occurred a couple of years ago has made the lenders become strict on the people they now give loans to.
The first thing to do is knowing about your monthly debt obligations. Take the time to document all the debt payments and your monthly income. You will need to give the lender pay stubs for two weeks so that they verify the income you get. The whole process will be harder if you have more than two sources of income or if you are self-employed. The lender will need to determine if you can pay the mortgage payment before they approve it. If you are to pay for large debts, then you will be approved for only a small mortgage. Before you can choose to apply for the loan, you should strive to first pay off these debts.
Another thing that you need to do is check the health of the credit. You need to have a copy of your credit history and your recent credit score. It is good to ensure that your report does not have late payments or any negative remarks. If you have a low credit score, you will need to find cosigner who is qualified. You can also choose to wait until you have improved your credit score before you get the mortgage. Before you choose to apply for the mortgage, it is best for you to stay several months without applying for new credit.
Additionally, you will need to determine the budget for getting the mortgage. It is important for you to know how much house you can afford comfortably before you meet with the lender. You should add your full housing payment with the taxes and the insurance. It will be best to have an amount that is less than 35% of your total gross income. Your safest bet is getting a house that does not exceed 25% of your income.
It is also good to decide the amount you will save for a down payment. When you have analyzed the credit and worked on your budget, you will then need to work ion your down payment. Be aware that the real estate agents are there to convince you on getting more house than what you actually need. You may also find that you are facing the temptation on your own. However, the best thing for you is to stick by the payment you are sure you can afford when in a good financial state and a bad financial state.