Applying For Your First Home Loan Mortgage: 3 Important Steps To Get You Where You Need To Be

Being approved for your first home would be a dream come true - the American Dream - and it may not be as far out of reach as you think. Even when you're young and (seemingly, or in the eyes of a lender) inexperienced, if you can demonstrate on paper that you are responsible and able to pay, what's to stop you from achieving that dream?

1. Start Saving For A Down Payment Now

Saving up a significant amount of money for your down payment will show a lender that you are a) responsible, and b) able to pay, at least in theory, because you know how to handle your money. Having a sizeable down payment will lower the total amount you finance, making the entire scenario even more plausible for you.

Cut out any and all unnecessary expenses right now and divert that money towards your down payment. If you can pick up extra hours at work or even a second, part-time job, direct those additional earnings to the down payment savings account and you're looking better and better, in the eyes of a lender.

2. Take A Good Look At Your Credit Report

Hopefully, you don't have any major scars on your credit report and it's crucial that you see this paperwork before applying for a home loan mortgage. Look it over for possible mistakes that companies may have made over the course of dealing with you and if you discover incorrect data, give them a call and ask them to make it right. This report should represent you as accurately as possible, because any strike against you could be fatal on a mortgage application. Work with past creditors, if you find they've reported old bills you've long since forgotten to pay or perhaps moved away from before they were sent. Optimally, your credit report will shine by the time lenders start looking at it.

3. Reduce Your Debt In Any Way Possible

One major yardstick lenders use to measure your eligibility for a loan is your debt-to-income ratio. This simply stands for the amount of money you're obligated to pay every month vs your monthly income. In the eyes of the lender, if you owe on too many other loans, they're afraid you won't be able to pay theirs back. Start lowering your debt-to-income ratio the moment you realize you want to own your own home, by taking the following steps:

• Cease taking on any more debt than what you already have.
• Pay in cold, hard cash from here on out.
• Try to pay a little more every month on the debt you already owe.
• Keep crunching the numbers, to ensure you're on the right track, month after month.

Nothing should stop you from achieving the dream of owning your own home and it won't, either, so long as you work your credit rating into reasonable shape and learn to manage your debt-to-income ratio. Shop around for a lender, once your finances are situated and keep shopping until you find the terms that will suit you best from a lender that will serve you well. Even though it's their money on the line, it's you who have so much at stake, making it necessary that you be as choosy with your lender as the lenders are with their loan approvals. Contact a company, like Mortgaged LA, for more help.

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