Before you can acquire the home of your dreams, you’ll need to weigh your financial options first. At the top of your list should be securing a mortgage, but how do you get the best rate possible? It starts with taking proactive steps and making sure you are well qualified.
Show Employment Stability
Mortgage lenders prefer people who have employment stability, as this shows you can pay for the monthly payments on a consistent basis. If there are gaps in your work history, try to hold down a job for as long as possible before applying for a mortgage. This shows you are financially responsible and capable of affording monthly mortgage payments. You’ll probably need a couple years of financial data.
Showing employment stability can be somewhat difficult if you are self-employed, as you may have jobs that come and go. Some mortgage vendors may actually require you to pay more because of the increased lender risk.
It’s reported that at least 9 million people in the U.S. are self-employed, and this trend will continue to rise as technology grows. Fortunately, even self-employed professionals have the ability to get a decent mortgage rate. You just need to prove your income, which you can do by providing tax return statements. Lenders also like to see your payment history increase over time, as they see you as less of a risk.
Talk to an Exclusive Buyer’s Agent
You may not know where to begin when applying for a mortgage, but an exclusive buyer’s agent has your back. The professionals represent only buyers and can explain the various avenues available to you when applying for a mortgage. They might ask you to save a lot of money for the down payment and lower your debt-to-income ratio.
FHA-insured loans may be another option recommended by your agent. These are appealing to borrowers with less than perfect credit scores. You also won’t need as much for the down payment and these loans are assumable, which means you can take over a seller’s existing FHA loan. This works to your advantage, especially now that mortgage rates are on the rise.
Securing a mortgage is the most important step you take when buying real estate properties. Weigh your options heavily and consult with a real estate agent if you get stuck along the way. They are there to take some of the pressure off your shoulders and make the entire process go easier.