If you want to use a mortgage for covering the cost of a new home? In such a case, it is important to prepare your finances and understand how you will manage your monthly expenses. Let’s look at how you can run a quick financial health check so you can ensure that you are ready to apply for a mortgage.
Update (Or Start) Your Monthly Budget
To begin with, it is crucial to be ready with the fundamentals. Create a monthly budget to track your income and expenses. After you have a mortgage, you must prioritize your monthly payments, to make sure that you don’t end up falling behind.
It is very easy to start a budget using mobile apps, software, a spreadsheet or basic stationary. Note down various sources of income to ensure that you know the amount of money that you are working with. Then, note down each one of your expenses, even though the process can be quite challenging. However, this can be simplified using debit and credit card statements from the last several months as a reminder.
Get A Copy Of Your Credit Report
Next, obtain a copy of your credit report to understand what potential mortgage lenders will look at when they evaluate your financial history. This is a free service and can be sought once each year. Hence, make the most of it. Remember that you must use government-approved websites to request your credit report. Be wary of scams.
Do You Have A Down Payment?
For each home purchase, you need not place a down payment. However, the process of buying becomes easier if you have it ready. Your home’s cost will determine the amount that you must have saved up, which could include carrying private mortgage insurance as well as other parameters. Try to save an amount that is about twenty percent of the home’s purchase price.
Ready? Chat With A Professional
As you now understand how to run a quick financial health check, you can meet with a mortgage professional to understand your alternatives. Get in touch with us today for a list of friendly expert advisors.
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