Charleston Real Estate Top Hacks to Qualify for Your Dream Home

Charleston Real Estate Top Hacks to Qualify for Your Dream Home

Are you ready to take the big step and become a homeowner? That’s so exciting! Owning your own home is an incredible feeling and a huge milestone, it is the cornerstone of the American Dream and the greatest wealth-creating tool in the history of our country. But before you can get the keys to your new place, you need to make sure you’re in a good position to qualify for a mortgage.

Don’t worry, it’s not as complicated as it might seem. With a little preparation, you can absolutely get your finances mortgage-ready. Here are our top tips to help you qualify for a home loan:

Check your credit score

Your credit score is one of the most important factors lenders look at when deciding whether to approve you for a mortgage. You want your score to be as high as possible to get the best rate and terms. If your score needs some work, spend some time improving it before applying. Things like paying all your bills on time and paying down debt can give your score a nice boost. You can easily get an idea of what your credit score is using a service like Credit Karma which while not a mortgage score will tell you what is on your credit report so you can address anything that needs attention before applying for a loan. You can also get a free copy of your credit report from Experian here. What you are looking for is anything that may be a negative mark on your credit and your credit usage. Often simply paying down credit cards to 25% of available credit will dramatically improve a score.

Charleston Real Estate Down Payment Assistance Programs

Down payment assistance is available for many homebuyers. Long gone are the days of lenders requiring a down payment of at least 20% of the home’s value. Still, the more you can save up, the better position you will be in to get a better loan with better rates and terms. A bigger down payment means a smaller mortgage, which can get you a lower interest rate and more affordable monthly payments. We have a half dozen down payment assistance programs available to our clients at any given time so reach out if you need more information.

Charleston Real Estate Mortgage Pre-Approval

Get pre-approved. Before you even start house hunting, get pre-approved for a mortgage. This shows sellers you’re a serious buyer and gives you a good idea of your budget in fact most sellers will not accept an offer from a buyer who is not pre-approved because they don’t know if that buyer can actually buy the house or not. The pre-approval process involves the lender reviewing your financial information and giving you a pre-approval letter stating how much they’re willing to lend you. Having this in hand makes the whole home-buying process so much smoother.

Charleston Real Estate Credit Repair

Minimize your debt. Lenders look at your debt-to-income ratio when deciding how much to lend you. The lower your debt, the better. Try to pay down any outstanding credit card balances, personal loans, or car loans before applying for a mortgage. Having minimal monthly debt payments will make you look like a safer bet to lenders. Most importantly do not take on any more debt during the homebuying process.

Charleston Real Estate Closing Costs

Save for closing costs or ask the seller to cover them. In addition to your down payment, you’ll also need to budget for closing costs, which can be 2-5% of the home’s purchase price. These are the various fees and taxes associated with completing the home purchase. Make sure you have this money set aside so you’re not caught off guard. If you are asking the seller to cover them often you have to increase the purchase price to compensate the seller the advantage to you as a buyer is you are financing that difference over 30 years at what is typically the best rate available at the time.

Getting ready to buy a home takes some preparation, but it’s so worth it in the end. Follow these tips and you’ll be well on your way to qualifying for the mortgage you need to make your homeownership dreams a reality.

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