Things To Do Before Sitting Down With A Home Loan Lender


Buying your first house is a major life decision. It's likely you already know that this decision is something you should be putting a lot of homework and research into before you actually reach out to a home loan lender in your area to discuss obtaining a mortgage, but maybe you don't know where to begin. Here are some tips about what you should be thinking about and how you should prepare before you sit down to apply for a mortgage loan for your first house. 

Estimate Your True Monthly Costs

You might have a target number in mind when it comes to how much you are comfortable paying every month for your new house. But keep in mind that your true monthly costs and your mortgage may include more than just the price of your house spread over the life of the loan. Your home lender is going to want to see you carrying homeowners' insurance which is a necessary addition to your monthly budget. You will have utilities to pay for. You should probably be saving some money every month for maintenance and future repairs.

Discuss Down Payment Options

General wisdom when it comes to buying a house is that it's a good idea to have 20 percent of the purchase price available as a down payment. Having this amount of cash on hand may qualify you for more loan options from more lenders. It is possible to find a home lender that will help you buy a house for less or even no money down. Keep in mind though that a lower down payment may require you to pay more every month on the mortgage itself and there might even be additional insurance costs when the down payment is especially low. If waiting another year to save up some more money for your down payment could help you get a significantly better loan, it might be worth waiting.

Get Your Paperwork Organized and Ready to Go

Show up to your first meeting with the home lender prepared with as much financial documentation as you can provide. You should bring your most recent tax documents like a W-2 or any 1099-MISCS if you are a contractor. Your most recent pay stubs for the current tax year are also a good idea. If you are going to a home lender who is not your current bank, consider bringing printouts of your most recent bank statements.

If you'd like to read more, check out a variety of home loan providers' websites.


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Borrowing What You Need

When it comes to borrowing cash for a new house or a nice car, how much money do you really need? Although you might be tempted to mortgage yourself to the brim or borrow a little more than you should, the fact of the matter is that everyone has financial limits. My blog discusses the impact of borrowing more than you need, so that you can make smarter decisions with your money. In addition to keeping you out of trouble, this valuable information might also improve your quality of life and protect your financial future. You never know, it could make all the difference.