The Best Way to Get a Mortgage
- 1). Know your credit history and check your score. Check your credit report by ordering a free copy from Annual Credit Report. Check the report for information such as collection accounts and late payments that can disqualify you for a home loan. Get your credit score from Myfico.com to assess your rating.
- 2). Show income sources. Make copies of your most recent tax returns or paycheck stubs to show mortgage lenders. This information helps lenders determine affordability.
- 3). Improve credit before applying for a mortgage. Raise your credit score to 680 before speaking with home loan lenders. Establish a history of timely payments to demonstrate that you're able to manage credit wisely. Dispute errors on your credit report and discuss rapid re-scoring with your creditors. This method updates your credit report within 72 hours and quickly improves your score.
- 4). Lower debt to qualify for a mortgage. Too many debts can stop a home loan application or reduce the amount that you're able to borrow. Pay off credit cards and do not take out any new loans.
- 5). Look around and compare mortgage options. Credit score minimums vary depending on the type of home loan. Check with a broker to explore all your home loan options. Submit a request for free mortgage quotes. Quotes allow comparisons between lenders. You need to evaluate different loan terms, interest rates, monthly payments and closing costs.
- 6). Start saving early for a down payment on a mortgage loan. There is flexibility with regards to mortgage loans. Plan to spend between 5 and 20 percent on your down payment.