Preparing for the Mortgage Process As a First-time Home Buyer

Buying your first home requires a significant amount of preparation. And unless you intend to pay in cash, getting ready for the mortgage process is one of the most important tasks at hand. Besides, you don't want the frustration of finding your dream home, only to realize you're not financially qualified to own it.

There are three steps preparing for your first home purchase mainly involves - improving your credit status, saving up for your downpayment, and providing evidence of a steady and adequate income. 

Improving Your Credit Status 

As you may have known, having a good credit score is crucial to getting a mortgage. It's certainly a good time to review your credit reports for mistakes and maybe hire a credit score monitoring service. A good way to drive up your score is to pay down your credit card balances and avoid using your cards for at least two months prior before your mortgage application. It will also be wise to postpone any plans of getting a car loan or even a new credit card until you've closed on the property.  Know more about house values .

If you're buying a home with your spouse or any other co-buyer, note that lenders will probably look into the other person's credit score as well. Lastly, remember that significant improvements on credit scores usually take at least half a year to show up, so the earlier you start making changes, the better.

Saving Up for Your Down Payment

Aside from ensuring you have a good credit score, you also want to make sure you have the cash to make a down payment. This is usually around 3.5 to 20% of the property's purchase price. While saving money, resist the urge to invest in the unpredictable stock market. You may get a good return eventually, but the risk is that the money may not be available when you're all set to purchase a house. Also never underestimate how much you'll need. It's always wise to prepare more than what you think you'll need after computing all the costs.  For more info about real estate, visit http://money.cnn.com/real_estate/continued.html .

Providing Proof of Income

Lastly, if you're about to put an offer on a property, start gathering papers that will be required by lenders to verify your financial status. These include your paystubs, bank statements, W-2's copies of your last two tax returns, etc. Remember, no matter what you say, you have to provide proof that you make what you say you make. Please check out http://realtyfortwayne.com/ if you have questions.