One of the most important things to do before buying a home is to get the very best mortgage interest rate possible because a higher interest rate means you will be paying more for your home while a lower interest rate means that your payment will be more affordable.
If you have questions about how to get the best interest rate, this article will provide you with tips on what mortgage lenders are really looking for and how you can make the experience of buying a home more favorable for you.
Tip 1 – Start Monitoring Your Credit Score Now
Thankfully, you can indeed qualify for a mortgage loan with a credit score that’s as low as 580 but, if you want to qualify for the best loan possible you should start monitoring your credit score now just so you can get your credit score up to 700 or better.
Tip 2 – Don’t Change Jobs for A While
Have you been planning on changing jobs? While you’re in the process of buying a home, you should put your job change plans on hold for a while because lenders will want to see that you’ve been in a stable job for at least 2 years.
Tip #3 – Lower Your Debt-To-Income Ratio (DTI)
Besides mortgage interest rates, your debt-to-income rate is one BIG thing that could hurt your chances of buying a home because most lenders will not pre-approve a buyer who has a debt-to-income ratio that’s more than 28% on the front end and 36% on the back end.
Instead of paying off a ton of your debts right now, you should contact a mortgage lender now because they can advise you on which debts you should pay off that will help you to have a stronger mortgage application.
Some of the other helpful things you should do before buying a home include:
- Save at least 20% for a down payment on a home.
- Have at least two months worth of cash reserves
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