Buying a new home can be an exciting time, but figuring out how you’ll afford it can be tricky. Not everyone has the funds to pay for a house on their own, which is why financial institutions like Central Willamette Credit Union offer mortgage loans in Albany, Oregon.
Securing your mortgage loan can be an easy experience when you’re well prepared. Doing things beforehand, such as checking your credit score, saving, and paying off debts can put you in a good position to receive a low-interest loan and get you the house of your dreams. Here are a few other things that can help you to secure the right mortgage loan for you.
Be Aware of Your Credit Score
When you’re trying to secure a mortgage in Albany, Oregon, one of the first things you should do is check your credit score. Your credit score is a reflection of your ability to borrow and pay back money. As you spend money using things like a credit card and pay the money back each month on time, your credit score will increase. A good credit score will make it that much easier for you to secure a loan.
If you’re unsure about whether your credit score is good, you should check your score online. You’re able to request a free copy of your credit score from three major credit reporting agencies each year, so take advantage of that. If your score isn’t doing so well, you should take the time to improve it before applying for a mortgage. A credit score in the 700 range is considered good, but your score has the potential to reach up to 850 points. The closer you get that number, the better your chances are of getting a mortgage at a good interest rate.
Put Down a Larger Down Payment
Having a significant amount of money saved up can be an asset in the homebuying process. When you apply for a mortgage for a home, lenders will request that you make a down payment. The amount they request can vary from as low as 3 percent to as high as 10 to 20 percent. Though it may seem like an intimidating amount to pay in cash, it’s actually beneficial to use a larger down payment for your loan.
Putting down a larger down payment can help you in a few ways, one being that it will make credit unions more willing to approve you for the loan. The larger your down payment is, the less money you need to borrow from a financial institution. This can also save you money in the long run. Your loan will be smaller depending on how much money you put down initially, which means that there is less money subject to interest.
Just like you wouldn’t buy the first car or house that you lay your eyes on without looking at others first, you shouldn’t go with the first mortgage rate offer you receive. There are many things that go into having a mortgage, and you want to make sure you’re making the right decision. After all, you’ll be paying off your mortgage for up to 30 years, and you want to make sure that the financial institution you’re dealing with is a good one.
When shopping around for a mortgage in Albany, Oregon, a local credit union will be your best option. Credit Unions like Central Willamette Credit Union offer competitive rates to members, as well as helpful resources such as a mortgage calculator or a meeting with a home loan specialist. Aside from great interest rates, the financial institution you choose to get a mortgage from should have excellent customer service and convenient branch locations for you to choose from.
Have a Steady Employment History
Reliability is an important quality in a borrower and one that can give lenders peace of mind when determining whether to lend you a large sum of money. There are many ways to show that you’re reliable, and one is having a steady employment history.
Your employment history can play a role in your ability to secure a mortgage in Albany, Oregon, as lenders like to see an employment history that’s free of large gaps of unemployment. Lenders want to feel confident in your ability to make your monthly payments on time, and gaps of unemployment with no income coming in can cause them to be cautious of you.
If your employment history isn’t the best, you should consider waiting to apply for a mortgage until you can improve your employment history. Try to stay at one job for an extended period of time and then revisit applying for a mortgage.
Pay Off Outstanding Debt
When you apply for a mortgage, lenders will ask you for a lot of information about your finances. One of those questions will be about your outstanding debt. Things like car loans, student loans, and credit card balances will all be taken into account when applying for a mortgage. If you have what lenders consider too many outstanding debts, they may deny your mortgage application or give you a higher interest rate.
To give yourself the best opportunity to secure your mortgage loan, you should try to pay off as much debt as you can before applying. Try to tackle the smaller debts, such as credit cards or medical debts, so that they can be wiped clean from your borrowing record. The lower your outstanding debt payments are each month, the more likely you’ll be to secure a loan at the credit union of your choosing.
Determine Your Budget
When you’re on the hunt for a new home, you’ll be tempted to look at homes outside of your budget. It’s easy to get excited about homes outside of your price range, but being realistic about what you can afford can help you secure a mortgage faster. For this reason, it’s a good idea to determine your budget before you start house hunting and before you apply for a mortgage.
Determining a budget requires you to sit down and examine your finances. Experts say that you shouldn’t pay more than 28 percent of your monthly gross income on your mortgage payment, so figuring out how much that is exactly can help you to determine your budget.
You should also take into account any other monthly payments that you have to make and make sure that they can be met with your potential mortgage payment. Figuring these things out beforehand can help you avoid getting in over your head with a hefty mortgage payment.