If you’re thinking about buying a home soon, you want to be prepared for the mortgage approval process before you begin shopping. Getting a mortgage pre-approval should be one of the first steps you take before house shopping to understand how much house you can get qualified for. Be prepared and your pre-approval can be easy and stress-free.
Start at least 90 days before you want to Buy
If you think a home is in your future, your best bet is to start early to prepare for mortgage approval. The more you understand about the process, the easier it will be. Even if a mortgage is not in your future, getting your finances in order is never a bad idea.
Understand and Repair Your Credit
Understanding where you are credit wise is not only important for mortgage lending but important for financing anything in general. The better your credit score, the more advantageous your position, particularly when applying for a mortgage.
When you run your credit report, you may find some issues. It’s better to take care of these before you go shopping for a home or a mortgage. It’s also a good idea to pay down as much outstanding credit card debt as possible. If your credit score is less than perfect, there are still loan programs that are available to you. But any lender wants to see that you pay your bills responsibly and on time.
Job and Financial Stability
Lending is a risk and lenders want to make sure you are risk worthy. They want to know that you can afford the home you’re buying, and they will ask for bank statements, W2s and pay stubs in order to feel confident that you can do so. Any large deposits will have them questioning where it came from. This is also not the time to be changing jobs or making large purchases. Job stability and financial stability are what they are looking for in a borrower.
Know Your Debt-to-Income Ratio
Your debt-to-income ratio is one of the ways a lender will decide whether you are able to manage the monthly payments you’ll be taking on. It is calculated by taking your monthly debt payments divided by your gross monthly income. There are several factors and programs (some allow over 50% debt to income ratios, others much less). Call our local, Colorado-only mortgage team and we will find out exactly what you can qualify for.
Talk to a Local, Colorado Only, Mortgage Expert
Talk to a professional. Getting a pre-approval and the insight of a professional mortgage broker is helpful when you’re thinking about shopping for a mortgage. A professional mortgage broker can steer you in the right direction and can help you find the right financing and lender for your current financial status.
At Front Range Mortgage, we have helped borrowers in Denver, Colorado Springs, Grand Junction and throughout the Western Slope communities get the financing they need. In Denver call us at (303) 500-1900; In Colorado Springs call (719) 540-2020 to speak with one of our knowledgeable mortgage professionals.