View our useful tips that can help ease your tension, and most importantly, help you prepare for your first mortgage in 2018!
2018 is here and as a new homebuyer, you are about to take on one of your most significant challenges yet—your first mortgage. The thought of maintaining a monthly mortgage over a span of ten to thirty years may seem like a daunting responsibility and commitment. However, there are several useful tips that can help ease your tension, and most importantly, help you prepare for your first mortgage!

The Down Payment

You may know this by now, but it never hurts to reiterate the importance of a down payment. As a homeowner, the down payment is the first financial investment for your home. While you may be struggling to decide how much to put down, consider that a higher down payment can result in lower and more manageable monthly mortgage payments.

Many lenders agree that 20 percent of the purchase price will get buyers the lowest rate. However, it is not uncommon for many homeowners to put down anywhere from 5 to 15 percent. A lower down payment may require you to pay for mortgage insurance; this is an added monthly expense that you will need to take into consideration. It is important to explore ALL down payment options and land on the one that best fits your financial situation. 

Cash Reserves

We have all heard the age-old advice regarding a need to save up reserve money when it comes to buying a car, moving to a new city, or planning for an engagement. Similarly, a strong savings is one of the most important steps in getting ready for a mortgage. New homebuyers are often uncertain about how much they should save before they make a home purchase. The best indicator for a healthy savings amount is based on how much you have in “reserves.”

Cash reserves, would be based on  the remainder of your savings after you have paid the down payment and closing costs. Your cash reserve will prove to lenders that you can pay for any unexpected costs without missing a mortgage payment. Your lender can help you decipher the minimum reserves you need to help qualify for a mortgage loan. So to get ready for  a mortgage in 2018 might mean tightening your budget and increasing your monthly savings.

Reducing Debt

Outstanding personal debt is factored into monthly mortgage interest rates. Lenders tend to favor candidates with lower debt-to-income ratios. This is considered alongside your employability and income stability. Lenders like to see that you have maintained employment for at least two years and can pay other monthly expenses with your current income.

It is also important to keep your finances steady during the mortgage process. Applying for new credit or running up your credit cards while waiting for the mortgage loan to get approved are red flags the lender will see when running your credit report before finalizing the mortgage. Noticeable changes to your credit score can delay the process or even force you to reapply. As you are gearing up in 2018 to take on a mortgage, knowing your debt-to-income ratio is critical. Make plans to get it aligned with the bank’s lending requirements to setup a lower mortgage rate.    
 
Talk to a Mortgage Specialist  

Take a breath, there’s no need to do this all on your own! Talking to a Mortgage Specialist helps new homebuyers better prepare themselves for the responsibility of a mortgage. A great Mortgage Specialist is someone that you can rely on that eliminates the chances of encountering surprises during the home buying process. They also can help you consider overlooked questions such as closing costs, grant assistance or discount points that could help reduce interest rates. By serving as an effective partner, a qualified Mortgage Specialist will help you land on the best deal tailored for your needs and goals.

Finding a trustworthy Mortgage Specialist doesn’t have to be hard, you can contact one today from Marquette Bank by calling us at 708-364-2525. Our expert Mortgage Specialist will help you for FREE and can get you started on your home buying journey right away. Our Mortgage Specialists are friendly, reliable and here to help you find and purchase your perfect home in 2018 or when you’re ready!