3 Financial Tips That Will Lead to a Better Mortgage

Buying a house is one of the most exciting (and nerve-racking) times in a person’s life. As you begin reviewing the inventory that is available in your local towns, you’ll want to take several pro-active steps to ensure that securing a mortgage is as easy as possible when the time comes to bid.

Since you’ll be dealing with what seems to be mountains of legal paperwork, the stress of selling off any old properties you have, and literally scouring each bank account you own for every piece of usable savings, it is important to have a clearly organized path towards successfully obtaining a mortgage neatly laid out in front of you.

It is in that light that experts suggest focusing on the following 4 tips as you prepare to formally buy a house

1. Clean up Your Financial Life- The first step towards successfully securing a mortgage is to make sure that your (and your fiancée’s!) personal expenses are in proper order. Look into every credit card and recurring bill to make sure there are no large outstanding balances. Double check that your accounts are all in good standing and that you are up to date on your taxes. Most importantly, make sure that there are no unusually large deposits in the bank account you plan on leveraging for your down payment within at least 3 months of your planned bidding date; loan advisers will not only want to see your detailed bank account history, you’ll have to formally explain every non-recurring paycheck deposit of over a $1,000. Simply put- they’ll want to make sure you aren’t relying on non-maintainable means for your home like a family loan.

2. Get Pre-Approved- Becoming pre-approved adds a certain level of “seriousness” to your bidding ability. Sellers will be much more inclined to accept an offer from a pre-approved buyer because there’s significantly less uncertainty as to whether they can afford to purchase the house. From a buyer’s point of view, providing the necessary tax returns, bank statements, and paycheck stubs to get pre-approved early in the process will only save you valuable time on the back end; there’s no need to over-complicate the closing with unforeseen financial issues that can stop you from receiving your mortgage in the “25^th”

3. Be Smart About Closing Costs- Most people totally forget about closing costs when it comes to planning out the percentage they want to establish as their down payment. Deposits, attorney and agency fees, inspector invoices, etc. all need to be accounted for to ensure a smooth transaction. There are so many things that can slow or completely halt a closing process. Make sure you’re financially equipped.