Are you thinking of buying a home in the near future? If so, you will need to apply for a mortgage. This can be a daunting process, but it doesn’t have to be. In this blog post from the Rob Ellerman Team in Kansas City, we will discuss four things that you should know before applying for a mortgage. By understanding these concepts, you will be able to get approved for a loan more easily and save money on interest rates!
Your Credit Score Is Important
The first thing you should know is that your credit score is important. Mortgage lenders will pull your credit report when you apply for a loan. They will use your score to determine whether or not you are a good candidate for a mortgage. If your score is low, it could mean that you will be offered a higher interest rate on your loan.
Understand the Different Types of Mortgages
The second thing to keep in mind is that there are different types of mortgages available. You will need to choose the right one for your situation. For example, if you are a first-time home buyer, you may want to consider an FHA loan. These loans have lower down payment requirements and are easier to qualify for than conventional loans.
You’ll Need Proof of Income, Employment & Assets
The third thing to remember is that you will need to provide documentation when you apply for a mortgage. This includes your tax returns, bank statements, and pay stubs. The lender will use this information to verify your income and assets.
Be Aware of PMI
The fourth and final thing to know is that mortgage lenders typically require borrowers to purchase private mortgage insurance (PMI) if they are putting less than 20 percent down on a home. This insurance protects the lender in case you default on your loan. It is an additional cost that will be added to your monthly payment, but it can help you get approved for a loan with a lower down payment.
Learn More About Buying a Home
Are you getting ready to buy a home in Kansas City? The Rob Ellerman Team is here to help. We will be by your side throughout the entire process, from your preapproval to closing, to ensure you are confident and comfortable with the home buying process. Contact us today to get started.
