Are you in the market to buy a home? One of the most important milestones in your journey to becoming a homeowner is the mortgage loan application. However, before you decide to apply for a loan, consider the following five tips.
5 Mortgage Tips to Consider Before You Buy a Home
1. Know What You Can Afford
Don’t fall into the trap of securing a higher loan than you can afford to pay back. Be realistic in your homebuying experience, and only agree to a mortgage you know you can pay toward each month. Consider all of the other costs that will come with living in a new home, including hiring landscapers, purchasing décor, and clearing driveways. You should also take vacations and casual spending into account when examining numbers.
2. Work on Your Credit Score
Before applying for a home loan, check your credit score, then spend some time building it up. Work hard to pay off any outstanding debts, and put off any large purchases or credit applications until after your loan application. Even a few points increase can save you big money when it comes to your mortgage.
3. Obtain a Mortgage Pre-Approval
Though it isn’t required, it’s wise to get pre-approved for a mortgage loan in the early stages of your quest to buy a home. Pre-approval will give you a more specific price range for your home search, as well as show realtors the weight of your intentions.
4. Explore the Location
Before taking settling on a house and applying for a mortgage loan, spend time exploring the neighborhood and surrounding areas. Consider how long your commute will be to work and the grocery store. You should also think about the area’s property values and growth, as these aspects may affect the future marketability of your home.
5. Read the Contract Closely
Anytime you are required to sign a legal or financial document, you must read it in its entirety. This is especially true when you buy a home. Not only should you be aware of what your mortgage contract says in terms of payments, fees, and interest, but you should also check for any constraints that may have been included by the seller, such as a 30-day period before they’re required to move out.
From being aware of what you can afford to working on your credit score, there are many ways to prepare for obtaining a mortgage loan on your new home. For all of your homebuying and selling needs in the Red Wing, Minnesota and Western Wisconsin areas, contact the real estate agents at Lawrence Realty Inc. If you’re ready to buy a home, call (651) 388-4745 today or visit the website to schedule your consultation.