You’ll make quite a few purchases throughout your life – from education to cars and everything in between – but nothing is as significant as buying a home. It’s an emotional, semi-permanent purchase that can feel overwhelming. There will likely be mounds of paperwork to sort through and a lot of time spent with your mortgage broker and real estate agent. Before you jump into buying a home, why not make sure you’re able to get approved for a mortgage loan?
The process of getting approved for a mortgage loan can be time-consuming and difficult, especially if you’re not prepared ahead of time. It’s a lot different than getting a car loan or trying to rent an apartment. If you want to avoid disappointment, make sure you’ll get approved for a mortgage loan before house shopping.
How to Get Approved for a Mortgage Loan Before Buying a Home in Alanton Virginia Beach
When you’re looking at Alanton Virginia Beach homes for sale, it’s easy to get caught up in the beauty of the luxury real estate available throughout the charming neighborhood. Before you get too excited, you need to make sure you’ll be approved for a mortgage loan. Here are 5 tips to help you make sure you get approved for a mortgage loan:
- Know Your Credit Score
If you don’t already know your credit score, do some research. It only takes a few moments to pull your credit report, yet far too many people attempt to buy homes without having this crucial information on hand. You can never assume your credit score is high enough to qualify without checking first. Why? Because you might have old debts you forgot about, or worse, debts that aren’t yours that need to be disputed.
A low credit score will have a huge impact on getting approved for a mortgage loan. Most lenders require a minimum score of 680, and if you don’t meet this minimum score, your application will be denied. If you’ve always paid your bills on time, that’s great... Just make sure you’ve reviewed your credit score, regardless, because you never know what errors might be keeping your score low.
- Save a Large Down Payment
Try to save as much money as possible for your down payment. All lenders have their own unique criteria when it comes to down payments, but expect to pay at least 3.5% and aim for higher (around 20%) if possible. If you’re expecting to get a loan with zero cash down, it's not common but not impossible. It’s very rare you’ll be able to find a lender who will accept your mortgage loan application without any down payment available unless you are using a VA Home loan or a VHDA Home loan.
A higher down payment means you’re more likely to be accepted for a mortgage loan. Plus, you’re able to forgo mortgage insurance, known as private mortgage insurance, if you have a 20% down payment. This means you’ll pay lower, more affordable monthly payments towards your mortgage.
- Consider What You're Comfortable Paying
Before you speak to someone about getting a mortgage loan, think about what you’re comfortable paying. This is vastly different than what you can afford. You might get approved for a higher amount, but that doesn’t mean it’s best to buy a larger, more expensive house. Consider what you’re comfortable paying and make sure you’re accounting for savings, paying off debts, and other financial goals.
As a good rule of thumb, try to keep your total housing payment around 30-35% of your pre-tax income. If you can keep your total housing payment around 25% of your pre-tax income, that’s even better. You’ll be happy you were more conservative in the future, especially if something unexpected happens that changes your financial situation.
- Maintain Your Long-Term Employment
If you’ve been working at the same place for a long period of time, this will work in your favor. Make sure you don’t change your employment or income status while you’re looking at homes and trying to get approved for a mortgage loan. There is nothing more desirable to a lender than stable employment. Any changes in employment or income status can lead to the lender denying your application.
Whether you’re looking to find a lower-paying job that requires fewer hours or you’re about to quit your job to pursue starting your own business, make sure you wait it out until after you’ve been approved for a mortgage loan. While you’re waiting, avoid taking unnecessary risks.
- Pay Down Any Outstanding Debt
Prior to submitting your application, try to pay down any outstanding debt as lenders will evaluate your debt-to-income ratio. You don’t want to carry a high amount of debt, and if possible, try to avoid adding any new debt onto your plate while you’re waiting for your application to be approved. You don’t necessarily need a clean slate, but you’ll get a better mortgage rate with less debt.
If you’re thinking about financing a new car or co-signing a loan for a friend or family, wait until after you’ve been approved for a mortgage loan and close on your new house. This means you’ll need to hold off on any exciting “new home” purchases, such as appliances or furniture if you’re using a credit card to buy them.
What Else Should You Know Before You Look at Alanton Virginia Beach Homes for Sale?
If you’re ready to submit your mortgage loan application and find a home in Alanton neighborhood Virginia Beach, that’s great! We’re sure you’ll find the home of your dreams in this charming, lovely neighborhood. If you haven’t already, check out our recent blog post detailing all of the things to do and homes to buy in the area. So what else should you know before you move?
The cost of buying a new home always exceeds the purchase price and any fees associated with buying a house must be considered. Many home buyers are surprised when they find out how much more they need to pay on closing day. If you want to avoid any unexpected surprises, consider preparing for the following:
- Deposit: If you’re putting an offer on a home, you’ll need to provide a deposit to give the seller peace of mind. It shows you’re serious about following through with the sale. A higher deposit is better, but there’s no set amount to expect.
- Home inspection fees: Don’t skip the home inspection. The cost of a home inspection will usually outweigh the cost of skipping the home inspection and finding problems later. Expect to pay anywhere between $300 – $600.
- Appraisal fee: The lender will likely charge an appraisal fee for the service of figuring out what they’ll lend you. You should expect to pay anywhere between $300 – 600 here.
- Legal fees: You’ll have to pay your real estate lawyer, if you’ve chosen to work with one, for all the legal paperwork they’re helping you fill out. Expect to pay between $500 – $1500 here.
You should also keep property taxes in mind. Virginia Beach is known for its lower tax rate – $0.99 per $100 of assessed value. When you’re looking at Alanton Virginia Beach homes for sale, it’s important to consider property taxes as they’ll impact the overall cost of your purchase. Home insurance is another factor that cannot be overlooked either, take the time to shop around to get the best policy.
Alanton, Virginia Beach is a beautiful location featuring a wide range of homes for sale – from rustic ranches to waterfront estates. You’ll feel right at home. Take a swim at the Alanton Pool Virginia Beach, enjoy shopping at the local shopping center, or spend some time in the great outdoors at First Landing state park.
Alanton, Virginia Beach is a great place to move – so why wait? Click here to contact us, give us a call at 757-350-1149 or send us an email at firstname.lastname@example.org to start planning your next move now! I’m here to answer any questions you may have about your real estate goals.