Owning your own home is one of the best investments anybody could ever make. But there is so much at stake, especially in the run-up to getting a mortgage. The preparation process is potentially long-winded, stressful, and financially taxing. It certainly opens our eyes to the state of our finances. What do we all need to do to prepare for a mortgage?
Prioritize Your Credit
If you are looking for mortgage quotes you will get a far better result if you make sure your credit score is as best as it can possibly be. You need to get the best possible rates, and therefore prioritizing just how creditworthy you are is the most important stepping stone. Your credit report needs to be as accurate as possible, and there should be no discrepancies potentially harming your scores. There are a number of things we can do to fix our credit score:
Limiting how often you apply for new accounts.
Not missing payments.
Building your credit file, as a good credit score involves having credit in the first place.
Making sure all of your personal details are correct is also crucial. If there are any inaccuracies with the main credit bureaus, you need to get these cleared up as well. Monitoring your credit score over time will give you an idea of how your score fluctuates, and you can then take the appropriate steps to investigate what could be hindering your ability to get on the property ladder.
Be Realistic About Your Affordability
It's critical that we do our homework in terms of the best deals we can get through loan brokers and rates before we commit to anything. When we do the hard work upfront, it will benefit us much better over time because we will have far more improved rates and mortgage terms. But we also need to be realistic about what we can afford. So many people opt for the best of the best when it comes to a property, but if you find yourself struggling to maintain mortgage repayments because you have completely stretched your financial capabilities, you've got to ask yourself some hard questions and determine what is realistic for you:
If you're looking for a rate that requires a high down payment, do you have time to save up for this down payment?
Do you anticipate any career changes or anything that will affect your ability to repay the mortgage over the first few years?
If you opt for a shorter mortgage with either adjustable or fixed rates, will you be able to finance it regardless of the external circumstances?
Preparing for a mortgage is no doubt highly stressful; however, it is so important for you to prioritize this upfront. It can be a lot of hardship, but if you struggle to get onto the property ladder now, this doesn't mean that it will be like this forever. Things are tough right now; however, use this as an opportunity to get your finances in order as well as changing your attitudes towards expenditure. For example, getting rid of your debt and living far more effectively within your means.
