With housing prices and mortgage interest rates at an all time low, now may be a good time to look into considering looking into real estate in Highlands Ranch. Before you truly begin looking, it is important that you begin planning on how you will obtain your mortgage and what kind of rates and loans you are entitled to. Because of more higher lender requirements, your down payment, credit score, income, monthly expenses, debt-to-income ratio, job stability, and savings will all play a role into you being approved for a mortgage. These are a few tips to help you prepare for your mortgage:
Tips for Obtaining a Mortgage
Get a copy of your credit score before going loan shopping. There are many different online services that allow you a yearly free credit report. Make sure you examine it carefully for any errors.
Calculate and review your finances. Calculate all of your fixed monthly expenses then include a potential mortgage payment, homeowner’s insurance, taxes, and HOA fees. Make sure to include your fixed expenses such as car payments, credit card debt, and general living expenses. It is also advised to calculate for any home maintenance costs as well.
Have all necessary documents. Lenders will ask for a large amount of documentation regarding your salary, savings, job stability, debts, etc. You will need to provide pay stubs for at least the past 30 days, W-2 forms for the past 2 years, retirement, investment account statements, and a listing of your debts and monthly expenses. If you are self-employed, you will also need to submit at least two years of tax returns and possibly a profit-loss statement.
Work out your debt-to-income ratio. This ratio compares the gross amount of money you earn to the amount that you owe to creditors, such as mortgage, car loans, credit cards, etc. The lower your number, the better. Lenders generally will require scores at or below 36%.
Need Some Help?
Mortgages, especially for first time home buyers, can be extremely confusing and this is completely okay! If you or someone you know is in need of some advice in buying a home, contact us here today at The Kuchar Team where we can help you with all of your Highlands Ranch real estate needs.