Securing a mortgage to buy a home involves many factors…income, credit history, debt-to-income ratios, savings and access to funds. You must be able to prove that the income needed to afford the mortgage payments are verifiable and that you have a stable job history. You will need to make sure your credit history demonstrates that you fulfill your repayment obligations and are fiscally responsible. Your monthly debt must fall within the acceptable limits outlined by loan programs that may be available to you. Finally, you will need to show you have sufficient funds available to you for the required down payment, closing cost and in some cases reserves. A really great mortgage professional will review these items with you, discuss your homeownership goals and suggest the best strategy and the loan product that best fits your needs.
There is tremendous value in meeting with both a mortgage professional and a real estate professional several months prior to starting the process of buying a home to obtain all the pertinent information. You will want to make sure that you are making the proper steps toward homeownership while avoiding missteps to ensure the desired outcome. For example, you may want to payoff small debt, avoid incurring new debt or refrain from making large purchases that could impact your savings. If you plan to pull out monies from an account or other funding source, you will want to be advised as to how and when that should be done as not to raise unnecessary red flags. Similarly, if you will be receiving a gift to assist with your purchase, again you should know how best to do that.
Getting a great head start will be the key your success!