Have you been looking to get on the property market, but don’t know where to start? Don’t worry, no one learns how to get a mortgage before they need one, so keep reading for some tips on how to qualify for a mortgage, how to apply for a mortgage, and other essential information.
Before you can even start looking for a property to buy, you need to have as much cash ready as possible. Yes, you will be borrowing money to pay the house off, but you also need to provide a down payment. 10% is typical, but if you can, you should pay even more than that. The more you cover with your down payment, the smaller your monthly mortgage payment will be.
If you’re not exactly a trust fund baby, you may have trouble qualifying for your first mortgage. There are some programs that offer assistance to low-income individuals or people who are in otherwise difficult situations that do not allow them to purchase a property. Look into all of your options.
Not a lot of people can afford to outright purchase property independently, so they get help from partners, friends, or family. Shared ownership can be the ticket to buying your first home, so don’t disqualify it as an option.
You just have to make sure that the person you are going in on this with is trustworthy and that your joint purchase doesn’t turn out to be a mistake if you have a falling out further down the line.
A lot of potential buyers are concerned about how to get a mortgage with a low credit score. The best thing here is really just to try as hard as you can to clean up your credit and improve your score. A better credit score shows mortgage providers that you are a responsible individual who can take on a mortgage payment and will be able to afford it, long-term.
You can improve your score by paying off old debt and credit cards, setting up direct debits to make sure payments are made on time, and taking out small loans that you pay off on time.
Choosing the right mortgage provider is half the battle when looking to apply for a mortgage. Mortgage providers such as JG Wentworth, Lending Tree, Magnolia Bank, NBKC Bank, or New American Funding will be able to help you out with your application process. It’s important to pick an institution you can trust and that will work with you to help you qualify for a mortgage within your budget and needs.
No property is going to be pristine – there’s always going to be something to tweak and remodel, so waiting for the perfect one may just be a waste of time. In addition, a property that needs some TLC is going to be more affordable, so it’s definitely to your advantage. Don’t overlook those diamonds in the rough; a property’s potential can be very valuable.
If you do qualify for a mortgage, make sure that it’s something you can afford and can sustain for years to come. Traditional financial wisdom says your mortgage payment shouldn’t account for more than 25% of your income, otherwise, you might get in trouble with affordability. Never commit to something you can’t afford, because you will most likely be paying this for the next decade, and you don’t want to end up losing the property.
If you’re unsure about what you can afford, you can always use a mortgage calculator to figure it out beforehand. It’s a quick and easy way to get an answer; all you need to do is input the value of the property, the value of the down payment, the type of mortgage, and the interest rate, and a monthly mortgage payment will be generated for you.
All in all, getting on the property market may seem difficult, but it’s not impossible. You just need to keep these tips in mind when you’re starting out.