How to Get Prepared to Submit a Mortgage Application

The process of buying a new home can be intimidating and overwhelming. For most people, this is going to be the most expensive purchase of their life. Therefore, it is important to get the job done correctly the first time around.

This means taking the time to get prepared prior to submitting a mortgage application. This can be hard to do without understanding the entire mortgage process from start to finish.

Before getting started, everyone needs to take the time to understand how home loans work. This will help everyone get prepared when looking for a THDA loan.

Assess the Financial Situation

Unless someone is going to pay cash for a home, they are going to need to apply for a loan. One of the important steps in deciding whether or not someone will qualify for a home loan is taking a look at their financial health.

This means analyzing the credit score, the current debt, and the current income stream. It will be important to discuss all of this information with a trained and experienced lender.

Someone’s overall financial situation is going to play a major role in how much home they can afford and the overall interest rate on their loan.

Looking at the Credit Score and Report

The lender is going to require someone to submit a credit report prior to applying for a new mortgage. It is best for people to understand what is going to be in their credit report before starting this discussion.

Most of the major credit bureaus are going to allow one free credit score report per year. Take advantage of this and remember to check all three bureaus before moving forward. This means going to Equifax, TransUnion, and Experian.

Furthermore, if someone finds something unexpected on their credit report, there might be an opportunity to repair this prior to meeting with a lender. A good credit score is very important in bargaining for a lower interest rate during the application process.

Weight the Cost and Mortgage Payment with a THDA Loan

Next, people need to figure out how much home they can afford. Take a look at the savings account. Then, look at the cost of the home. Don’t forget that there might be closing costs and fees associated with the purchase.

It might be possible to get these waived moving forward. Then, look at the mortgage payment and set up a monthly budget. Don’t forget about any homeowner’s insurance costs and real estate taxes.

Set up a realistic budget. Then, working backward, figure out the price tag of the most affordable home. This will help give the real estate agent some information to work with during the househunting process.

Submitting the Application

Finally, it is important for everyone to familiarize themselves with the various options on the market. Home loans come in many different lengths. There are also fixed-rate and adjustable-rate mortgage options.

In addition, people should understand the possible fees tacked on to a mortgage application. This will help everyone be able to shop around in an educated manner, looking for the right home loan for them.