If you’re planning on buying a home in the near future, which usually means you’ll be applying for a mortgage. When you’re planning on applying for a mortgage, there are three key things you should keep in mind.
Know your budget – your budget is a key indicator of what you can afford as a homeowner. Not only will you have to consider monthly mortgage payments, you’ll need to remember that you will have closing costs when you buy a home (such as fees, taxes, utility hookups and more) as well as maintenance costs that come with homeownership.
Get a pre-approval – a mortgage pre-approval is one of the smartest things you can do when it comes to gearing up to buy a home. This tells sellers that you’re serious, and will let you know exactly what you can spend.
Mind your debts – your existing debts have an impact on your mortgage approval, because lenders will be focusing on how much debt you have compared to income, as well as how much income you have compared to your mortgage cost. If possible, pay down as much of your existing debt before applying for a mortgage.