4 Tips To Follow Before Applying For Lending Home Loans In Fountain CO
For most people, home ownership is one of their main life goals. Since most people don’t have the money to buy a house outright, they are going to need to get a mortgage loan. If the homeowner wants the best chance of being approved for a mortgage loan, they should know a few things to do before they visit a company that specializes in Lending Home Loans Fountain CO.
How Much Can the Borrower Afford?
Before a person applies for a mortgage loan, they should figure out what they can afford to pay each month. If they borrow more than they afford, they could end up going through a foreclosure. The homeowner shouldn’t spend any more than 28% of their gross income on their mortgage payments. If they already have a car loan, a student loan, or any other monthly installment loan payment to make, the combination of these and the mortgage payment should not exceed 36% of their gross income.
Check Their Credit Score
The individual’s credit score is very important when they are applying for a mortgage. If their score is not high enough, their application will be denied. If the score is enough to be approved for a loan but it is still low, the individual could end up paying a very high interest rate on the loan. In cases like this, the individual should consider waiting to buy a home until they can raise their credit score a bit. This can save them thousands of dollars throughout the life of the loan.
Avoid Major Purchases
From the time that the individual applies for a mortgage loan until the day that they close on their house, every financial transaction matters. The borrower should also avoid applying for a car loan, a student loan, making major purchases and applying for a credit card.
Gather the Necessary Materials
The lender is going to require plenty of documentation for the borrower. This includes a month worth of pay stubs, two years worth of income tax filings, and three months worth of bank statements. If the individual has recently made a large bank deposit or withdrawal, they are going to need to show proof to explain these transactions.
Before applying for Lending Home Loans Fountain CO, the borrower should be prepared by following the tips listed above.