Are you aiming to become a homeowner as soon as possible? Don’t let these historically low interest rates pass you by –there’s still time to prepare for purchasing a home in 2020!
If you’re ready to jumpstart the process, here’s what you need to do to qualify for a mortgage.
Check your credit score
To lock down the lowest possible rate, you’ll need an excellent credit score. Although you may be able to qualify for a loan with a minimum score of 580, a higher score is more desirable and will save you money in the long run. Not pleased with your current score? Focus on paying down debt as aggressively as possible. Changes to your score will typically be reported within 60 days, so the sooner you can start paying off debt, the better.
Plan your down payment
An unexpectedly large deposit into your account can derail your path to homeownership. Before your lender reviews your bank statements, be prepared by having the down payment planned and documented. If you’re using gift funds as your down payment, have the letter from the donor ready to go. To see an example of a donor letter for gift funds, visit this site.
Ready to find out how much home you can afford? Get pre-qualified before you apply for your mortgage loan. Pre-qualification is based upon safe-reported information, so be certain to have a solid idea of your income, credit score, and all of your recurring monthly debts.
Interview Realtors and start watching the market
Once your credit is in good shape and you’re pre-qualified or pre-approved, it’s time to start interviewing realtors. An experienced realtor who’s familiar with your desired area is essential in your quest to homeownership, so take some time to find the right fit. You should feel comfortable communicating with your realtor and know that you have someone in your corner. The right Realtor will help you understand the market and set your expectations, so you’ll know whether you should submit an offer above, below, or in line with the seller’s asking price.
If you’d like to make 2020 your year to become a homeowner, you can make your dream a reality by starting on your checklist now.
By Michaela Phillips. Michaela is the Vice President of Mortgage Lending at Guaranteed Rate, Inc. Contact Michaela at 303.443.6292, e-mail [email protected] or visit michaelaphillips.com. NMLS: 312874.