At some point, everyone who gets a mortgage is a mortgage beginner. No matter how many properties you currently own, there was a first one, and chances are you didn’t know very much when you sought it out.
Getting a mortgage isn’t horribly complex or difficult, but it still doesn’t hurt to follow some specific tips when you’re a beginner to make the process a little easier.
In the time leading up to you looking for a mortgage, it’s a good idea to treat your credit with respect. If you have a poor credit rating and a history of not paying off loans or being irresponsible with other people’s money, your chances of getting a mortgage will suffer.
It’s also very important that you have a credit score at all before you look for a mortgage. Some people mistakenly believe that if they have no credit activity they are better off, but this isn’t the case.
In many cases, no credit history is just as bad or even worse than a bad credit history. If you don’t have one, get a credit card and start buying some things with it. When your bill comes in each month, pay it all off and you will start creating a positive credit history for yourself.
Determine Your Needs
Knowing what you need in terms of a mortgage is also a great piece of advice for beginners to take with them. It’s important to figure out the monthly income and then keep your mortgage payments in the 25 to 28 percent range. Make sure that you are doing the calculations with pretax income.
It’s also a good idea to figure out what your needs are in terms of square footage and all that before you start, too. Many times, first time buyers haven’t figured it all out ahead of time and they end up with more house and more mortgage than they need.
Consider an Agent
Utilizing the skills of a mortgage agent when you are still a beginner in the mortgage game is usually a wise choice. A mortgage agent will approach multiple lenders on your behalf so you end up with the best deal and the best term for your new mortgage.
Working with an agent takes a lot of the stress of approaching banks off your shoulders. It also opens up a lot of possibility as far as the variety of mortgage products you’re able to choose from.