Buying a home is a big step in your life, and is probably the biggest investment you will ever make. While you are probably feeling a lot of excitement and anticipation, you may also feel nervous and worried as well. Being prepared and knowing what to expect will help you secure easy home loans and take the first steps toward being a home owner. Increase your confidence and preparedness by taking care of these three things before you apply for your loan.
1. Save Money for Your Down Payment
Saving up for your down payment can take a lot of time, but it is an imperative part of the home buying process. In order to qualify for a conventional home loan, you will need to save anywhere from five to 20 percent of the home’s sale price. Even if a large down payment is not required, keep in mind that the more you pay upfront, the lower your monthly mortgage payments will be.
2. Gather Your Documentation
Gathering your documentation can be a hassle, but it’s one of the most important steps in the home loan process. Lenders want to see documentation regarding your income and taxes, so plan to gather up last year’s tax return documents and W-2s. You should also plan to print out the last two months of your bank statements and bring two recent pay stubs with you when you talk to the lender.
3. Check Your Credit Score
At least six months before you purchase a home, check your credit score and know where you stand. If you need to make improvements, begin working on them immediately. Depending on how bad your score is, you may need to put off your home purchase for a few months or years while you focus on repairing your damaged credit.
With the right amount of preparation, getting approved for a home loan can be easier than you think. Still have questions about the home loan process? Give Wasatch Peaks Credit Union a call at 800.331.7549 and we will be happy to tell you more.