Whether you’re moving across the country or purchasing a vacation home, there are a few requirements you must meet when qualifying for a mortgage. Here are some things you need to know about getting a mortgage in New Jersey:
Better Your Credit
Your credit score will be seen as proof to your lender that you will be able to repay your loan on time. It tells them that you are trusted since you have a consistent income and you paid all your credit off on time. Paying your bills on time and keeping your score up will affect your ability to get a loan. With lower credit scores, you will have a much harder time getting a loan and will most likely need to pay more in interest. Make sure you know your credit score and work on making sure it stays up at an excellent rating. You can get a credit report for free online, so be sure to check it before attempting to apply for any loans. Pay off all your leftover balances on your credit card and try to limit the usage if possible. And finally, do not apply for a new credit card before you apply for a mortgage.
Figure Your Budget
You need to really figure out what you can truly afford when getting a mortgage in New Jersey. Take a look at your finances and figure what your ultimate goal price is. Most people will take out 10 percent of the home price and go for the basic 30-year mortgage. You can save a lot by planning and budgeting ahead of time. Try to choose a home that suits you and is no more than 2.5 times your yearly salary. Be sure you can pay the house off completely and comfortably with the salary you make, even if it means a higher monthly mortgage. Be sure to think about the worst case scenario way ahead of time.
Try to Get Pre-Approved
Going for pre-approval early can show the seller of the house you want that you have financial backing. Pre-approval by a lender will give you an idea of what you will be able to afford. They will provide you with a number of how much they are willing to lend you, which will help you gauge how much you can afford to pay for the home of your dreams. This will just make the house-buying process a lot easier.
Consider Your Options on Mortgages
To get a lower down payment with your mortgage, you will need a higher credit score. For example, with a credit score of 580 or higher, you will get a mortgage with a down payment of 3.5 percent, whereas for credit score between 500 and 579, you will need to make a down payment of 10 percent. This is after you find a lender that approves your loan. Also, keep in mind that paying less early on will mean more owed later. Borrowers have the option between fixed-rate and adjustable-rate mortgages. It will depend on your budget, needs, and income, so you will need to choose which best suits you.
Be sure to pick a home that you will want to be in for a long, long time – decades, in fact. When shopping for houses, you will want to find the perfect one for you that is located somewhere that you want to be. It should hit that perfect balance of what you can afford and what you want. Once you find this, jump on it. The market is quite competitive and aggressive, so you will want to act fast.
Once you’ve found your perfect home and you’ve got it all worked out, next comes the appraisal. Your lender will have your home appraised to determine its worth. Once you get the appraisal, the bank will officially approve your mortgage, and you will get an inspection done for the house. Anything found during the investigation may be able to bring down the price of your new home. After everything is done, you will want to order a title search as well as apply for homeowners insurance. Buy that insurance, move in, and love your new home!
Aceland Mortgage provides guidance on getting a mortgage in New Jersey that is fair & affordable. Get in touch today to see how we can help!