- Buying a house and getting a mortgage loan involves a lot of paperwork and it takes time for lenders to process the loan. What's more, it can take several weeks or months to locate the ideal property for your family. Be patient. Once a seller accepts your bid for a property, it can take up to 30 days to close on the mortgage loan.
- A multitude of home loan programs are available, and some are specifically designed to help first-time home buyers and people with past credit problems. Talk with a mortgage broker before applying for a home loan to learn all options available to you. Get pre-approved for a mortgage loan prior to starting your search.
- Buying a home requires disposable income or savings. Several fees are associated with buying a home such as earnest money deposit (about $500), credit application fees, home inspections, appraisal and settlement fees (2 percent to 6 percent of the sale price). Many home loan programs also require a minimum down payment of 3 1/2 percent to 5 percent.
- Building a good credit score is imperative to qualifying for a home loan. The higher your score, the lower your interest rate on the mortgage loan. Order your credit report and score; do everything possible to raise your score to 680 or higher.
- The Home Loan Learning Center states the importance of keeping credit card and other debt payments low when qualifying for a mortgage loan. Lenders will divide your monthly debt payments (including the mortgage payment) by your monthly income to determine the percentage of your income spent paying debt. Debt ratios higher than 36 percent decrease your chances of getting a loan. If you are approved with a high debt ratio, lenders may charge a higher interest rate.
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Types of Mortgage Loans
Considerations
Benefits of a Good Credit Score
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