Connecticut Mortgage: 4 Basic Steps For Buying a Home
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. There are many Connecticut mortgage options open to first time buyers. But, you will need to be prepared first. 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 Connecticut 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 your 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 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 Connecticut 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 Connecticut 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 Connecticut 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.
Please feel free to call me today for a free consultation on what your Connecticut mortgage options are.
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