The concept of a mortgage may seem like a modern idea, but mortgages have existed since ancient times; perhaps since some of the first homes were built! One of the earliest known mentions of mortgages comes from the Code of Manu, an ancient Hindu text that outlines fair and judicious mortgage laws. Though much has changed since antiquity, the basic concept of a mortgage has not. Home mortgage lenders still offer home loans and are still bound by the law.
If you want to secure the best home loans available, there are a number of steps you can take. Here are three pieces of advice to secure the home of your dreams:
- Clean up your credit history: A strong credit score is essential to securing the best home loans. Potential home buyers with low credit scores often have to provide a higher down payment as compensation. The best mortgages go to prospective buyers with stellar credit ratings. The Home Loan Lending Center calculates that most mortgage lenders require a minimum credit score of 680. Cleaning up your credit history and fixing any errors will increase your chances of securing low interest home loans.
- Don’t pay too much: Though this point may seem obvious, the fact remains that you should aim for a certain housing debt-to-income ratio to best provide for your house. Ellie Mae recommends that homeowners have a ratio of 24% based on its studies.
- Save, save, save: Another seemingly obvious point, setting aside money for closing costs and other moving-in expenses is a prudent idea. Avoid major purchases that may deplete your savings before securing a home loan.
There are other ways to secure the best home loans (and many types of mortgages) but no matter how you go about it, getting a mortgage for you and your family is not impossible. In fact, by taking a few careful steps, you can be on your way to owning the home of your dreams.