Mortgage Application Checklist For First Time Home Buyers

| April 18, 2016 | 7 Comments

First time home buyers checklist

 

Mortgage Application Checklist

For First Time Home Buyers

If you have a dream about owning your own home and applying for a mortgage then you may be a bit nervous when beginning the process. While having your own home is just about every family’s dream the high prices and paperwork involved can be overwhelming. In addition to this, many lenders will be more concerned with earning a profit than with helping you find a home that matches your income. Below are some steps you can take to properly apply for your first mortgage.

Applying for a mortgage used to be simple. People would compare the prices and rates on houses they wanted, and once the found a lender they were comfortable with, they would make a large down payment and then move in. Today things have changed, and going through the number of options available can be very stressful. One thing you should do before shopping for a house is to educate yourself.

First Mortgage Application Steps

The first thing you will want to do is look at your current income. How much do you make per year? How secure is your job? Remember, if you go about getting a mortgage the traditional way, it could take 15 to 25 years to pay it off, and if you get behind on your payments, you could lose your home and have your credit ruined. If you can’t afford a home, it is best not to move into one until you can. This will keep you from taking on debt you can’t afford.

How Much Can You Afford?

If you feel that you can afford a mortgage the next thing you should decide is how much you can afford. Lenders have a tendency to offer you mortgages which are more than you can afford, and this is important to remember. In addition to the cost of the mortgage itself, you will have to pay taxes, insurance and other expenses as well. These costs should be included in your monthly expenses.

Apply Directly Or Via A Broker?

When you begin looking for a mortgage you will encounter two types of lenders; mortgage brokers and direct lenders. The direct lenders are the people who have the money to lend you. They are ultimately the individuals who decide if you will be approved for a home. The mortgage broker acts as a middleman, going out and finding direct lenders who can give you the best deal.

While the lenders may have a limited number of loans available, a mortgage broker will often have access to multiple lenders simultaneously. If you are looking for a specific type of mortgage, a mortgage broker may be better to use than a direct lender. However, a mortgage broker will charge you for their services, and this could be a certain percentage of the mortgage loan you end up with. With the rise of the internet, online mortgage brokers can help you save money.

Get The Paper Work In Order

Once you have found a loan through a direct lender or mortgage broker the next step is to fill out an application. There are a number of things you will need to fill out on the application and it will help if you have some supporting documents. You will need to provide information about your income, length of employment, and your assets. They will also want to know what other loans or credit cards you have.

Once this information has been provided, the lender will look at your credit report. In addition to this, they will want to see your bank statements and check stubs from your job. You may also need to show them tax information and data about your insurance. If your credit is good, an appraiser will be hired to make sure the house is valued at the loan amount that will be given to you.

Andrew @AndrewWBradley

 

Photo credit: Alan Cleaver via Foter.com / CC BY

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Category: Finance, Home & Garden, Living, Tips, Weekly Themes

About the Author ()

Andrew is a licensed Life Insurance Broker and Registered Retirement Consultant-RRC® helping Ottawa families since 2011. Awards : 2017 ThreeBestRated.ca -Handpicked Top 3 Financial Services in Ottawa, 2017 Faces Magazine Awards – Ottawa’s Favorite Financial Advisor, 2017 Feedspot Top 40 Life Insurance Blogs on the web and 2016 Insurance Business Magazine – Life & Health Advisor of the Year Finalist.

Comments (7)

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  1. Cheryl says:

    Thanks for the tip. So many people jump into a house before fully understand what they are getting into.

  2. Elizabeth Matthiesen says:

    I think that this is really very important that people understand what having a mortgage entails. It can be a big worry and you need to know exactly what you are letting yourself in for. Thanks for the very informative post. 🙂

  3. sabina Edwards says:

    my sisters 44 and just got her first house this month and my daughter will be eligible to do the incentives for grad students wanting to buy their own homes

  4. Lynda Cook says:

    It’s great for first timers to do their searching and studying, just don’t go jumping right in and buying the first home you see!!

  5. Maggie C says:

    Thanks for this! I am looking to purchase my first home and your article is a great overview.

    Do you know if there is a different between a loan at a bank versus through a mortgage broker?

  6. KD says:

    “Lenders have a tendency to offer you mortgages which are more than you can afford, and this is important to remember.”

    This is very true!

    We recently bought our first house, but only purchased what we could afford on one salary, so we wouldn’t need to worry during mat leaves or if someone lost a job.

  7. Judy Cowan says:

    Good tips for first time homebuyers, it can definitely be an overwhelming process.

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