What You Should Know Before Applying For Your First Mortgage
One of the biggest things standing between a first-time buyer and their dream of home ownership is the mortgage. Unless you’ve saved up enough over the years to pay outright for your home, you’ll need a home loan to make your dream of home ownership a reality. In order to make your application seamless and stress-free, it helps to familiarize yourself with the process and get your documents in order before you consult a lender.
Here’s a quick overview of the different types of mortgages available to you, what documents you’ll need to apply, and more about the approval process.
Types Of Home Loans
The great thing about mortgages is that there are several different ones to choose from, each with its own set of pros and cons. A good lender can explain what the different types are and propose which ones you could benefit from the most. The most common mortgage types are:
- Fixed & Adjustable Rate
- Government Insured (Example: VA and FHA loans)
- Jumbo & Conforming
Veteran homebuyers have exclusive access to a VA loan to buy their first home. This requires no down payment, no mortgage insurance, and it’s extremely flexible. Learn more about this program and find out if you qualify now!
What Documents You’ll Need For Pre-Approval
Before you get in touch with a lender about pre-qualification and pre-approval, it’s a good idea to check out your credit report to find out where you stand. Other documents you might need to have on hand are recent pay stubs, tax returns, and bank statements with summaries of your debts and assets.
It’s hard to get attached to a property, only to find out that you can’t afford it. This is where pre-qualification is absolutely essential. The pre-qualification process simply takes a quick look at your financial situation and lets you know how much you could be approved for. This rough estimate will help you narrow down your budget, and you can use this site to set your search parameters to find homes within that price range.
Pre-qualification is a great way to find out how much you could borrow, but being pre-approved can actually give you an advantage when negotiating on a property. While pre-qualification takes quick stock of your financial picture, the pre-approval process takes a much closer, in-depth look at your income-to-debt ratio, credit history, and overall finances.
Those taking advantage of a VA loan will have to have the property appraised by the Veterans Administration before the loan application can be finalized. Your MilitaryHomeSearch.com agent and Veterans United mortgage broker can tell you more about what this process will include and can make this as seamless as possible.
Once the pre-approval process is complete, you’ll know exactly how much you can afford to borrow and a document on hand to show the seller just how serious you are about their home. Now, it’s time to get shopping!
Finalize The Loan
Once you’ve found the home that speaks to you, it’s time to negotiate the details, get it inspected, and finalize your loan agreement. At this point you’ll also have to be ready to pay your share of the closing costs for the transaction, which your agent will inform you about early in the homebuying process.