Review your credit report. When considering your application for a mortgage, the initial step for lenders in Lake Havasu City is to pull your credit report and your credit score. Make sure to check your credit report in advance and review it for any possible errors. If any errors are found, you can contact the credit bureau to get the errors resolved. By law, you are entitled to one free credit report every 12 months.
Determine what you can afford for your monthly payment. Almost all financial experts suggest spending close to 30% of your income on housing. So if you bring home $5,000 each month, the mortgage payment should be no more than $1,500 each month.
What are you willing to pay for the down payment? According to the Consumer Financial Protection Bureau, 20% of the home’s purchase price is the ideal amount for a down payment. But if you don’t have 20% for a down payment, stress not, Mohave Mortgage offers a wide assortment of credits, some requiring next to zero up front payment. Reminder the more money you are able to put down on your home, the less your monthly payment will be.
Gather up your paperwork. When you’re prepared to chat with a loan specialist, they’ll need a few documents from you such as recent pay stubs, bank account statements, W-2s, the total amount of your monthly debt payments such as car loans, credit card debt, student loans, etc. Also needed would be the names and addresses of your landlords for the past two years.
Get prequalified for a mortgage before starting your search. You can start the process to get prequalified with us today! This will allow you to begin your search with a realtor with a clear budget.
Figure out the most suitable mortgage option for you. Most common two options are fixed-rate and adjustable-rate mortgages. The fixed-rate mortgage has your interest rate locked in for the life of the loan. That means you’ll pay the same amount every month and be able to plan accordingly without worry. But an adjustable-rate mortgage, has a fixed interest rate for a set period of time, and then it will fluctuate according to the market’s inflation rates. So commonly, this kind of mortgage offers a lower, more attractive, introductory rate. However, if the market interest rate increases, it’s likely your mortgage rate will increase as well. Adjustable-rate mortgages have more variability than fixed-rates ones and are harder to predict, so being said they are only really suitable for individuals not planning on holding long-term mortgages.
Closing costs. Once you’ve found the right home and the seller accepts your offer, the process of purchasing the home will begin, this will involve paying closing costs to cover various bank, legal, and third-party fees. Closing costs can be paid by the buyer, the seller, or both; whoever pays for closing costs will be stated in the contract that your real estate agent arranges for you. Closing costs can vary up to 7% so get in touch with your realtor or mortgage broker to figure out a more accurate estimate of what to expect for your local area.