If you have started to look for a home then the chances are that you have also started to look for a mortgage, or even made an appointment to meet a broker. As anybody who has been through the home buying process before, this can be one of the most important meetings you will take on the path to buying your dream home.
To get you started on this path, below are some tips to help you prepare to meet a mortgage broker for the first time.
Give Yourself a Credit Check
The first thing that any reputable lender is going to do when you sit down it to check your credit report. Not just your score, but your report. Your report contains information about your frequency of payments along with the limits on your lines of credit.
Before you sit down in front of the mortgage lender, sit down at your kitchen table with a copy of your credit report and make sure that everything is correct. Pay attention to the following:
- An address which doesn’t seem familiar
- A debt you definitely don’t owe
- An application which you don’t recall making
- An incorrect spelling of your name on your DOB
Any of the above items could spell disaster for your application, simply because these are all potential instances of fraud. This means that somebody else’s behavior can impact your credit score! If you see anything that doesn’t seem right, report it and correct it.
Once you are confident that your credit score reflects only your previous spending, it’s time to consider the current. As in, how much do you make? What are your expenses? How much disposable income do you have? These are the three pillars to understanding your financial situation.
Sit down and formalize a budget which details all of your income streams against your monthly financial obligations. Be sure to include any investments you may have, no matter how small. However, if you have recently used the Groupon Coupons page for 23AndMe to find out more about your ancestry and have discovered a potential inheritance, this isn’t information which should be included in your budget.
When attending, take the following with you:
- Any confirmation or substation of your savings
- Pay stubs for the previous six months
- A letter from your employers detailing our employment history and current employment situation.
- Proof of savings for the previous three months
- Credit Card statements going back three months
While each lender’s requirement will differ, this information is sufficient to get any application started while you prepare further information to add later.
Nobody said that navigating your way through the mortgage maze was easy. However, nobody said that it was impossible, you just need to know a few tips and tricks, just like the helpful ones in this article. Along with these tips, ask your friends and family who have been through the process before for their advice. In particular, ask them about any information they wish they had known prior to starting the process.