Buying a home is one of the most important decisions you can make in your life. Home provides stability, security, and a place to raise a family and lead a fulfilling life. Getting the right mortgage deal, therefore, is critical. Getting stuck with bad mortgage rates can put a serious damper on your finances and, really, your life.
There are many ways to go about applying for a mortgage, not to mention the fact that there are several types of mortgages to choose from. Commercial mortgages, for example, have their own rules, restrictions, and interest rates. Home mortgage rates are a whole different story. Applying for a residential home mortgage one of the most common, and most frustrating, mortgage types out there. It takes a lot of patience, prudence, and research in order to lock in the best home loans.
How should you go about it? Here are a few helpful pointers that will get your well on your way to the home of your dreams:
- Have a Strong Credit Score: Perhaps the most glaring component of your loan application is your credit score. The Home Loan Learning Center reports that most home mortgage lenders have a minimum credit score requirement of 680 (or 620 for federally assisted housing). Clean up your credit score to ensure you get the most favorable rates.
- Don’t Rock the Boat: If you’re in the midst of a mortgage process, it’s best to not make drastic changes in your life such as getting a new job. Major changes like that can disrupt or even ruin your mortgage application.
- Don’t Spend Too Much On Your Mortgage: Ellie Mae reports that a borrower should spend at most only 24% of their monthly income on the mortgage. Anymore than that risks debt and more harmful financial consequences.
Unlike commercial mortgages, home mortgages are more personal and follow different rules. To find out more, feel free to leave a comment or question at the bottom.