Applying for a home loan can be a challenge, especially in cities like Las Vegas and Reno. We put together a list of 5 things you need to know before taking the steps to apply for home loans.
Figure Out Your Credit Score
This first thing is very important when it comes to applying for a home loan. This is because your credit score will have an impact on which kinds of loans you can apply for, as well as how much and how quickly you have to pay the loan off. To understand how your credit score works, you must look at your credit history. Your credit history is a huge factor that will change what loans are available to you and what your interest rate may be. Your credit score is based on:
· Payment history
· How much you owe
· Length of your credit history
· Types of credit you use
· Any inquires for new credit
To qualify for a home loan, you will need to exceed a minimum credit score based on whichever program you choose. This will allow you to qualify for most loans.
Finding Your Budget
Your budget is very important to this process. Without it, you will not be able to calculate how you are going to pay off your loan, mortgage, or any other expenses. To find your budget, you must calculate your debt-to-income (DTI) ratio. To do this, you need to compare your debt and income – this will allow you to see how much money you can afford to spend on a monthly mortgage.
It is also important to use the 28%/36% rule. This rule states that you should not spend more than 28% of your gross monthly income on anything related to your home. You should not spend more than 36% on your total debts: this is everything related to your mortgage, credit cards, student loans, car loan, and so on.
Consider All Assets
You have just finished up creating a budget, what now? It is important to adhere to your budget. A way to help in keeping to your budget is to take into account all the assets that you have. When it comes to home loans, it is important to have more than your budget. This is because loans come with extra costs, these being your down payment and closing costs. When you eventually speak to a lender, they will look over your last bank statements. It is important for the lender to see any patterns that you have in your finances.
Do Your Own Research
It is always important to do your own research on finding a home loan. This is a huge commitment you are about to take. It should be something that you know everything about. You will want to do research on loans and rates as much as you can so you can find the best deal that you can.
Finding a Broker
Having a reliable broker is very helpful in this as they will give you recommendations on what lenders to use. This means that the broker will be your gateway to finding the best lenders. They are also the only way to contact some lenders. When looking for a mortgage broker, you should check the registry. This means that you would do research on the broker to make sure that they are qualified. You would also want to compare the services that each broker provides, as not every broker offers the same services.
Are you ready to apply for Las Vegas home loans? Without expert assistance, this process can prove to be difficult and stressful. That’s why you should reach out to Las Vegas loan officers you can trust, like Motto Mortgage Absolute. With our extensive experience in the industry, we can help you discover the best mortgage rates in Las Vegas, Reno, and – soon to be – beyond.