First Home Loan – Preparing For Your First Home Mortgage Loan Application

Buying your first house is an exciting time for any first time home buyer. For most, home ownership is the realization of the American dream. If you are applying for your first home loan, make sure that you take the following steps to not only secure a mortgage loan, but to get the best terms possible as well.

Your credit score is of paramount importance. The rules have changed recently and what used to be considered stellar credit is now considered average. You should ensure that you have a credit score of 740 or more to make sure that you qualify for the lowest interest rate possible on whatever type of loan you are applying for. There are several ways to raise your credit score quickly and consulting a credit repair specialist is an excellent idea for many.

Be prepared to put down as high a down payment as possible. The more you put down, the better your chances of being approved are, and the better your interest rate will be. Of course, keep a nest egg. Having six months of mortgage payments available to you in the bank will help you get through a loss of a job or a health issue, should either occur.

Lastly, pay attention to your debt to income ratio. This is what lenders look at to determine how much you make every month, compared to how much you owe every month. The higher the income and the lower the debt, the more attractive you are as a borrower.