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Applying for a mortgage can be stressful because buyers have to deal with credit scores, bank statements, closing disclosures and documents, interest rates, and much more. First-time buyers who do not know what all this means and what to do can fall into common pitfalls that make the process more complicated than it should be. We have put together this guide so you can have a smoother application process and fast-track your journey to homeownership.


Get Pre-approval First and Early

Ideally, you should get a pre-approval before looking at different properties. This is an in-depth process that includes a verification of your income, debts, credit checks, and other financial information. It lets them know whether you can afford the mortgage on your preferred property. This minimizes risk on their end and helps you avoid one that will be strenuous.

A pre-approval letter can also help you make a stronger offer because the lender has verified all your details and ability to meet your monthly obligations.


Avoid Applying If You Have Doubts About Your Finances

It is understandable to be excited about making an offer on your first home. However, getting carried away and choosing a more expensive one means you will have to pay a hefty deposit and a lot more interest every month.

You can either pick a smaller or cheaper property or consider applying only if you are in a financially secure position. Do consider waiting a little while to get there.

You can also use this time to improve your credit score. Remember, lenders are happy to give you a better interest rate and accept a lower deposit if you have a healthy score.


Do Work with Professionals

Different professionals have unique experiences and skills you can leverage when getting a loan. A financial advisor or CPA might advise you on how to structure your finances to ensure a smoother experience.

A mortgage broker, on the other hand, will give you helpful advice. You can also contact experienced mortgage lenders to assist with your application, save time and money, and help you navigate this process. They will tell you about the different loans that might seem similar but have slight differences, and assess whether the options you are considering will work for you.


Don’t Forget to Check for Additional Costs

Most people focus on the mortgage and its terms, such as their monthly payments and interest rates, and forget that buying property also comes with additional costs. For example, it costs about 1 to 4% of a home’s value to maintain it, so you should add this amount to the initial budget.

Other costs to consider include insurance, taxes, and other legal dues, moving costs, and necessary inspections.


Have a Savings Plan and Avoid Large Purchases

You should create a savings plan when you decide to take out a mortgage. This will make it easier to pay for the down payment, closing costs, and other expenses. Additionally, having savings will ensure you have enough funds to pay your bills and debts on time, which will prevent any red flags from appearing on your application.

Avoid making large purchases during this time, as they could negatively impact your credit score, especially if you default on payments.


Ask Any Questions You Have

Your financial advisor, mortgage lender, and loan officer all want you to be knowledgeable and confident about this process as you apply and go through it. They are, therefore, open to answering any questions you have to alleviate any confusion or panic you might have.

Importantly, stay in touch with them to check in regularly. These processes might yield additional insight that could be helpful, especially if you have doubts about any aspect of the home-buying process.


Avoid Switching Jobs

Lenders want stability so they can be confident about giving you the loan and your ability to repay it. Changing jobs and significantly changing your income might slow down the process. However, the negative impacts of either do not apply if you find a better job, are promoted, or receive a pay rise.

Financing through a mortgage is one of the most common paths to homeownership. The application process can seem daunting, but it does not have to be if you have the right people on your side and know what it entails. You should also have a savings plan, keep your credit score up, and do not overestimate your ability to repay to avoid stress in the future.