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Mortgage Application Tips
Are you thinking about buying a home? If so, you need to educate yourself first before heading out to talk to lenders. Knowing important information about the mortgage application process will help put you in better control. The process can be trying, meaning that you will need to be patient as you move forward. First, by the time you get to the mortgage application, you should already have done several things to make the buying process successful. If you are serious about buying a home, then the following should be done prior to filling out the application:

Save as much money as possible. Typically, you want to have as much as 10% saved for the down payment. In other words, if you will be looking at homes in the $200,000 range, you should have $20,000 saved. Now keep in mind that some lenders will work with down payments as low as 3% but in this case, the buyer has outstanding credit.

For a minimum of one-year prior to filling out the mortgage application, you want to pay all your bills on time, and if possible pay more than the minimum due. If possible, paying off as many bills as you can, starting with the highest interest bills first.

Have a credit report run from the three main reporting agencies to ensure they are showing accurate information. That means that any debt paid off is showing as paid off, bills paid on time or early are showing just that, and that there are no inquiries made by companies that were not initiated by you, the buyer. When you get ready for the mortgage application process, your credit is crucial. Each person has a specific score. The goal is to have the highest score possible.

Make sure you look for a home in the right price range. Unfortunately, some real estate agents are over zealous when it comes to selling and try to put a new homeowner in a six-bedroom home when all they need is two, perhaps three. Therefore, make sure you are buying the size of house you need for several years and not one that is too large.

Many people will start the application process and get pre-qualified. What this means is that they have met with a lender and been proved that when it comes time to secure the loan, they have an excellent chance. However, the better option is to get pre-approved. With this option, it means you have actually gone through the approval process with a lender and been approved for a loan. In other words, the lender will determine the amount of house you can afford based on your income versus debt ratio. Then, the application will be completed and you will actually be approved. This is a huge advantage in that you can look at homes in your approved price range, and when you make an offer, the seller will likely take your bid over someone else since they know you already have the money waiting.

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