Home Ownership in Connecticut

Posted on January 11, 2018 · Posted in Connecticut First Time Mortgage, Connecticut Home Purchase Mortgage

4 Basic Steps to Prepare for Homeownership


Buying a home is going to be one of the most important decisions you will ever make. Unfortunately, many home buyers take this decision too lightly and they jump into it without taking the proper steps to save money and make an educated purchase. Here are four things you should do to financially prepare for a home purchase so you don’t make an impulse decision that could cost you thousands more than necessary.



1. Lower existing monthly payments Debt is one of the main obstacles to getting decent mortgage rates when you decide to buy a home. If you have credit card debt, medical bills or other consumer debt, put your plans of buying a home on hold until you can at least pay down your debt considerably. Many financial experts suggest that you pay off as much debt as you can before applying for a mortgage as debt-to-income ratio is one of the three main things mortgage lenders evaluate. The lower this ratio at the time you apply for a mortgage, the better risk you are going to be.


2. Make “virtual” mortgage payments Start putting money is savings as soon as possible after paying off your debts. To practice paying a mortgage, you should do this the same time each month. Pretend that you already have a mortgage payment to get accustomed to making your payments on time so you will be well-versed in that when you finally purchase a home. Use this money for your down payment when you find the house you want to buy.


3. Know and improve your credit score One big mistake that first-time home buyers make is not knowing their credit score before applying for a mortgage. You can get free credit scores through various websites and since your credit score is one of the determining factors in getting a mortgage loan, you should know what it is before you apply. There may be things on your report that drag your overall score down, and inaccurate information may cause a lower score than what you should have. Take care of these things and improve your score as much as possible before you apply for a mortgage loan, even if it means postponing your home purchase. It’s better than getting a high mortgage rate and paying more than you need to over the term of your loan.


4. Gather financial records The days of “stated income” and “no documentation” loans are over.  All lenders conduct a complete financial overview on all borrowers to ensure they have the financial ability to repay the mortgage. Be prepared to generate the last 2 years of complete tax returns, w-2’s, recent paystubs, rental history and bank records.  By having complete documentation it will make the underwriting process smoother and give the underwriters a clear overview of your ability to repay.  At times the amount of paperwork required can be a daunting task to potential homebuyers so preparing beforehand can alleviate the stress during the home buying process.





Drew Raney/NMLS#117309
President of Northeast Financial
210 S. Main ST. Middletown, CT


Company NMLS#117273 





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