There are many parts of the home buying process which are positive and bring a smile to your face. Times like walking in the front door and realizing you found the right place or receiving the keys, for example. Then there is the rest of the process which is filled with experiences like inspections and meetings with your mortgage broker.
And while this article isn’t here to help you choose a property inspector, it is here to help you prepare to meet your lender or mortgage broker for the first time.
Get the Bad Stuff out of the Way
The last thing that a lender wants to hear is an excuse you are making for an unknown outstanding debt which has shown on your credit report. It doesn’t matter whether it’s yours or not, the fact that you have to make an excuse is often enough to turn many lenders off.
Instead of being stuck in this position, obtain your own copy of your credit report and score and go through it with a fine tooth comb. In particular, pay attention to any of the following:
- Incorrect spelling of your name
- Unknown address
- A line of credit you didn’t apply for
- A listed outstanding payment which was cleared
All of these can damage your credit score and are easily rectified with a bit of time and attention. Be sure that, by the time you meet your lender or broker, your credit score and report reflects yours and only your financial position.
Speaking of Your Financial Position
Off the top of your head, do you know how much expendable cash you have each month? Are you financially preparing yourself for any large upcoming expenses? How much money does your household bring in? If you can’t give the answer quickly then what you need is a budget.
A formal budget lets you see your financial position and gives you an understanding as to how much available cash you have each month, and what level of mortgage you can realistically apply for.
Once you have your budget set out and ready to show a lender, be sure that you can substantiate any of the information on there, but remember to keep it high level. For example, your lender isn’t’ interested in how much you spend and save at the Groupon Coupons page for American Express, but they are interested to see how often you pay your American Express card.
This last tip comes in the form of advising you to wait. If, once you have gathered all of the information above, you realize that you may not be in an ideal position to take on a mortgage, wait. It is far better to wait until you are certain that you can fulfill the financial obligations of a mortgage before you take one on as a financial obligation.
Despite what you might think or see in the movies, meeting with your mortgage broker isn’t a nightmare experience, but it can be quite daunting if you don’t take note of the tips above and prepare.