Tip #1: Determine what payment you can afford.
When you qualify for a mortgage loan, the lender is considering your gross income before deductions and debts on your credit report. They are not taking items such as childcare, insurance, utilities into consideration. Because of this, it’s very possible that you could get approved for a higher mortgage loan payment than what you can actually afford based on your budget and spending habits.
*** A good rule of thumb is to look at a payment that is similar to the amount of rent you pay monthly and adjust from there. Based on your rental payment, your lender can determine what a mortgage amount would be. ***
Tip #2: Get pre-approved for a mortgage loan BEFORE shopping for a home.
There is nothing more disappointing than finding your dream home, only to find out you are not approved or not able to be approved for the purchase price.
Tip #3: Start shopping for homeowners’ insurance as soon as you go into contract to purchase your home.
It is recommended to get quotes from different insurance companies. Rates can vary between mortgage companies. When you are comparing quotes, make sure the coverage amounts from each company are comparable.
Tip #4: DO NOT take out any new debt or after you are pre-approved.
The lender will pull an updated credit report prior to closing to verify there are not any new debts. Additional debt could mean that you no longer qualify for the mortgage loan.