Unless you have your own business, buying a home is likely the largest financial investment you’ll ever make. This is why buying a home in Lafayette, IN is a major stress point for most on the financial side of things. Acquiring a mortgage is a necessity if you don’t plan on buying your home outright, and there is a lot that goes into your Lafayette, IN mortgage approval process.
The home buying process can involve quite a bit of ups and downs. You may get your hopes up about a home and the seller pulls out of the agreement. You might make it to the final steps on another dream home and you realize that you’ve been denied the mortgage you need. You can lessen your chances of being denied the mortgage you need by making a few preparations before starting the home buying process.
Improving Your Mortgage Qualification
Improving your mortgage qualification chances means getting to know your financial situation first. This of course doesn’t guarantee your mortgage approval, but it does improve your chances a great deal. A few things you can do to better address your financial situation before applying for a mortgage in Lafayette, IN are:
- Take a good look at your credit report – Your credit report tells a detailed story of your credit history, and it’s something that all lenders will look at very closely. This means that you should look at it closely as well, and you are entitled by law for a free credit check once per year from each of the big three credit rating agencies.
- Address any credit related problems – While checking your credit report, you might see issues arise with your credit history. You might see debts that have already been taken care of still on your report, you might see information related to a former spouse, and you might spot inaccurate or out of date information. As you check your report, look closely for any of these inaccuracies and get them squared away before they cause any issue in your mortgage approval.
- Lower your debt to income ratio – Your debt to income ratio takes your overall debt and compares it to your yearly income. Ideally, your debt to income ratio will be as low as possible. Lenders prefer to see a debt to income ratio of 36% or lower including your would-be mortgage payments.
- Watch your spending – While waiting for mortgage approval, you should track all of your spending and have the proof to back it up. Overspending on frivolous purchases is a red flag to many lenders, who may be lead to believe that frivolous purchases will get in the way of making on time mortgage payments.
The Help You Need When Buying Your Home
Most new homebuyers of Lafayette, IN can use a little help when buying their first home. If you’re wondering how you can make the mortgage approval process a smoother one, contact us at Titan Lafayette Real Estate today.