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Best Mortgage Tips for the First-Time Homebuyer Taking a mortgage is no doubt a major commitment. If you’re a first-time home buyer, therefore, it’s important that you find the best deal available. To get approved and qualify for a decent rate, you will need to be in good shape, financially speaking. This means there are a number of things you must be aware of before arranging the mortgage. Here’s a look at a few tips that should help you secure the best deal possible. Budget It’s vital that you take time to budget before you apply for a mortgage. To begin with, consider whether you’ll be able to afford paying back the amount you’re borrowing.To begin with consider whether you’re going to afford to pay back the amount you want to borrow. Next, you’ll need to be sure that the amount you borrow will be enough to purchase the property, with some spare left to cover associated costs. For the monthly payments, do you anticipate any problems? Get a mortgage calculator to work out the math, so you’re well prepared before you approach a lender.
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Your credit score and credit history are among the factors your lender will consider when assessing how much of a risk you are. You should therefore have a look at your credit report before applying for the mortgage. The last thing your lender wants to see is credit cards with high balances. So pay off your debts, or at least try to keep your balances to a minimum. Not having any outstanding loans, such as when you’re financing a new car, also helps. Having your credit in good shape is a sign to the lender that you’re good at managing your finances properly, and this improves your chances of getting approved. Consider length of the loan This is definitely of one of the most important considerations. While a 15-year mortgage may be provided at lower interest rates, your monthly payments will be bigger than if the repayment period was stretched to 30 years. Taking a shorter-term loan would make sense if you can afford the large payments. Having a stable job matters Since most lenders need to see that you’ve been in a certain job for some time, having a stable job helps. So if you’re considering switching jobs, you may want to secure the mortgage first before going ahead. Many lenders only consider those who’ve been in their current jobs for at least three to six months. Remember that one of the things they’ll need is proof of income. This means obtaining the relevant documents from your employer. You might also be asked to provide your last three months’ pay slips and bank statements so the lender can have a look at how you’re earning and spending money.