
At Hamlet Homes,
our team is there for you throughout the entire home-buying journey — pre-planning, financing and on through construction. We know buying a new home can be a daunting process, but it doesn’t have to be! Let us help you get approved, so you can get into your new home in Salt Lake, without the heightened anxiety.
1. Get Your Credit in Order.
Like most consumers, if you aren’t getting ready to make a large purchase that involves some sort of financing, you may not be very familiar with your credit score. Some homebuyers don’t even check their scores prior to submitting a new home loan application. Don’t be left in the dark. Pulling your credit score only takes a few minutes, and it can prevent your mortgage application from failing from a low score or identity fraud. If your score could use a little improvement, pay your bills on time, lower your debt, and fix any crediting errors on your report.
2. Save, and Save More.
Though you can find options for home loans with zero percent down, most lenders require some form of down payment, usually 3.5%. In fact, the more you can put down on your home, the better. Higher down payments — above 20% — lower your monthly payment and negate the need for private mortgage insurance (PMI). Down payments aren’t the only cash expense during the
home buying process. Be sure to have enough cash saved for:
- Closing Costs (typically 3 – 5% of mortgage balance)
- Home Inspections
- Appraisals
- Title Searches
- Application Fees
- Other Moving Expenses.
Your personal mortgage may not require each of the above-listed expenses, but we suggest being prepared for them, so you aren’t blindsided half-way through approval.
3. Maintain Job Consistency.
Any changes to your employment can delay or stop the mortgage process. Taking a new position that is lower paying, commission-based, in a different field, or becoming self-employed requires your lender to re-evaluate your finances. Occasionally, it can derail your mortgage entirely.
4. Pay Down Debt.
The amount of debt you owe compared to your income (debt-to-income ratio) determines the amount of money you can obtain from the lender. If your ratio is too high, meaning you carry a lot of debt, the lender may approve you for less or reject your application altogether. For this reason, we suggest keeping your monthly debt payments lower than 36% of your gross monthly income. Even if you’re approved, be sure to avoid obtaining new debt until you close on your new home. You can stop your mortgage from closing by financing a new car or purchasing items for your
single-family home on credit. Be sure to wait until after close before making these purchases.
5. Get Pre-Approved.
Pre-approval for a mortgage loan can put your mind at ease and help you determine the amount you can spend before you begin the bidding process. These days, pre-approval is a fairly quick and simple process, so don’t wait to ensure you have the funds available to purchase your new home. If you’re still concerned about getting approved for your home, speak to the experts at Hamlet Homes today. We can offer you advice specific to your situation, and help you qualify for the right mortgage.