There are some critical steps that you can take to better prepare for obtaining the right home loan for you and your family.
1. We are going to start by going over DTI. Your debt-to-income ratio relates to the amount of your income that you are using to pay monthly debt and other expenses. It is usually suggested that no more than 28% of your income goes to your mortgage. So when you look at your mortgage and other bills/debts, you want to keep it at 40% or less of your income. A lender is someone that can guide you on what you may need to do or inform you if you are on the right track.
2. Saving for a down payment will enable you to prepare for your home buying step while also seeing what you can really handle. Of course, you can always look for a less expensive home, or once you pay off debts, you can put more towards the down payment. As a reminder, please also consider other expenses, such as the inspection.
3. You also want to explore all of the loan choices that fit your needs and lifestyle. They will come with different requirements and fees, so it is important to take the time to research or speak to an expert that can walk you through all of them. There are also some programs for first-time homebuyers, along with down payment assistance options.
4. Prior to deciding on a home, you want to find the right lender. We have qualified and trusted lenders to refer you to, and we know that they can and will answer all of your inquiries. The lender will again be able to discuss any possible options for you. They will make the process a little easier.
5. The final step we will share is gathering all of the appropriate documents to apply for a mortgage. You will need pay stubs, tax returns for the past two years, and bank statements. Other key documents will include loan statements, retirement funds, and investments. You may face some hurdles during the process, but this information will help you better understand what to expect. We are here to help in any way that we can.