Diane Stone - CENTURY 21 Commonwealth



Posted by Diane Stone on 8/13/2017

Longing to take ownership of a house could tempt you to shop for a lender who will approve your home mortgage even if your savings and your financial habits clearly signal that you are not ready to own a home. If you search long enough, you may find that very lender. You also might regret that you did.

You might want to put off signing a home mortgage

Going with a mortgage lender who doesn’t take a detailed look at your credit history could cause you to take on more mortgage than you can afford. Miss one mortgage payment and the lender might start foreclosure proceedings.

Foreclosure tends to start within three to six months after you miss your first mortgage payment. To keep from losing money on the house, lenders may work with you to restructure your loan, making the monthly payments more affordable.

The restructured loan may leave you with less to pay each month, but more to pay over the life of the loan. Another feature of the restructured home mortgage might be higher adjustable interest rates. It’s adjustable interest rate loans that can skyrocket as soon as markets or the economy start to strengthen.This trend helped to set off the Great Recession.

More reasons to go with a stricter home mortgage lender

Other reasons why you may want to work with a home mortgage lender who takes a deep dive into your credit history include:

Better understanding of the impact of your spending habits – After a lender turns you down, take the time to chart out what you spend money on and why. See if you are engaging in emotional spending. Seek support to deal with perceived lacks that are causing you to over spend as a way to feel complete,valuable or whole.

Time to strengthen your credit – Repair and strengthen your credit, so that you will get a home mortgage from a lender who’s committed to taking steps to remain solvent. Instead of looking at a thorough credit review as a bad thing, see it as a chance to improve.

Opportunity to retrain yourself – Start retraining yourself to approach your finances differently. Create a budget and stick to the budget. Look at money as a resource, not a magic wand. The retraining that you do could keep you from getting in over your head months or years after you buy a house.

Position yourself for a better home mortgage – Most of all, a good reason to prefer a rigorous home mortgage credit review is to position yourself to land the best mortgage that you possibly can. While you repair your credit and work to secure a better home mortgage, learn more about closing costs, interest rates, home inspections, realtor fees and commissions and lender fees.

Repairing your credit can take time. The good news is that you can make a lot of positive headway in just one year. To repair your credit and position yourself to secure a home mortgage with a reputable lender, pay off high interest loans and credit cards first. Take on additional work online or offline. Deposit money that you earn from this additional work into a savings account. Use this money to build a healthy down payment on a new home.

These actions can make your home mortgage application more attractive to reputable lenders. Furthermore, these actions can help you to get the best mortgage, a mortgage with a low interest rate and an affordable repayment plan.