Stressed About Buying a Home? Three Variables to Consider

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Buying your own home is part of the proverbial American Dream. For those looking for the best mortgages, it can be a stressful time. Purchasing a house is very likely the largest expenditure you will ever make; it is important to be satisfied with the final paperwork. Wondering what will help you get the best home mortgage rates? Below are three variables to get in order before signing.

1. Your Job.
Obviously, you need to have money coming in to pay your bills. When lenders calculate the best mortgages for you, it is fundamental that you have a steady work history that continues throughout the buying process. For the self-employed and contractors, try to start the process when you will to have a steady stream of work. Unexpected adjustments in employment could upset the process, or stop it entirely.

2. Your Debt-to-Income Ratio.
Those with the best home loans, according to Ellie Mae, belong to borrowers who have a debt-to-income ratio of 24%. Your monthly debt payments (mortgage, car, etc.) are optimal at less than 36% of your household’s monthly gross income. It is also highly recommended that prospective home buyers refrain from any big purchases just before beginning to look into rates for home mortgages.
It is also wise to set aside not just enough for a down payment, but a little extra for closing costs as well. Trying to figure out the up front costs? Lenders will typically ask for 3.5% of the total cost of the home as a downpayment.

3. Shop Interest Rates for Home Loans.
Interest rates are effected by the borrower’s credit. A score of at least 680 is typically required by most financial lenders, says the Home Loan Learning Center. One tip for those with a lower credit score: sometimes lenders will take more on the downpayment in an exchange for accepting a borrower with a low score. To find the best mortgages, you will want to look into what different financial institutions are offering to find a good rate. Try to get quotes from the list of mortgage lenders on the same day if possible. The market can change day to day, and you want to have an accurate comparison. Once you find a rate that works for you, try to get it locked-in right away.

Buying a house is an exciting time. Make sure you have everything in order to make the process go smoothly. Keep your job steady; get your credit score and debts in order, and find the best mortgage rate for you.

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