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Realizing the Dream: Home Ownership is Within Your Reach

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For many individuals, the most difficult part of buying a home isn’t getting the right one; it’s getting a mortgage. Asking a financial institution or a bank to lend a lot of money isn’t something a lot of people often do. In any case, buying a home represents the biggest-ever purchase for most Americans, and the highest amount they will have to borrow. However, contrary to common perception, getting a mortgage is not as hard as people imagine. Here are the simple steps to acquiring a mortgage.

What it takes

A credible mortgage organization (because there are some predatory companies which make loans that are non-traditional and do not benefit the customer) wants to ascertain whether or not you conform to a rule of 28/36. This rule implies that the household spends 28 percent of its verifiable income every month on housing expenses. These expenses range from the mortgage to insurance to any fees relating to homeowner’s fees. Additionally, the household should be spending not more than thirty-six percent (36%) on revolving debt.

Apart from that, you need to have an idea of the type of mortgage you are about to take. Do your shopping and determine which of those available will be ideal for your case. Sites such as can help you to shop and compare different mortgage rates available in the market.

Fix Your Credit

In the short term, you can only manage to fix some elements of your credit. The large ones that could have a significant impact are the amounts owed. Make sure you pay your debt balances in full so you can raise your score. Apart from that, avoid opening new accounts or engaging in any other activities that may bring about a credit check during the process of mortgage application. A new account could affect your application since lenders are often uncomfortable with customers that appear to have too much credit.

Prepare to Defend your Finances

When applying for a mortgage, you should be more than prepared to defend your finances. If you have an income showing in your statement that is unexplained, your lender will most certainly ask about its source to establish that you are not taking in a loan. For instance, if you obtain a substantial amount of money from your relative as a gift, you and your relative may need to fill out some paperwork as proof that the money wasn’t a loan. Also, you will need to explain everything from a scratch-card win to a work bonus if the money in your account looks suspicious. Generally, what the financial company is trying to do here is establish whether your statement is a true reflection of your financial status.

Have Paperwork in Order

A lot of mortgage institutions will want to see the most recent pay stubs, your tax records, and approximately ninety days of your bank statement. In other cases, the mortgage lenders may want to view documentation of your investments as well as your retirement accounts. Make sure you have this paperwork in order and update your details where necessary.

If you are thinking about getting a mortgage, you need to consider the above pointers. Work on your credit, defend your finances and have your paperwork ready to avoid setbacks during your mortgage application process.