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Getting a mortgage is usually the first step on the path to becoming a homeowner. Homeownership has been heralded as a hallmark of adulthood for a long time. The process can be a little intimidating when you’re going through it the first time. Here are a few things to consider when you’re applying for one.

Understanding Your DTI

One of the biggest things a bank looks at when considering mortgages is your DTI. That’s your debt to income ratio. This describes how much debt you’re carrying compared to your monthly income. Carrying a lot of debt has a negative impact on this score, making it harder to get a mortgage. The easiest way you can improve this score would be to pay off your outstanding debts. Another thing you can do is find a job that’s got higher pay. Raising your income can also improve your DTI. Either way, you’ve got to keep it under a certain limit to qualify for most mortgages. Otherwise, banks won’t be lending to you at all. Look at your bank’s lending guidelines to figure out how much they require.

How Much Can You Afford?

When you apply for a mortgage, banks give you a borrowing limit. A lot of people rush to find something at the top of their limit. That’s not a good move, though. Buying something near the top of your limit could place you under financial stress. That’s the most a bank believes you’d be capable of repaying. Try to stick with something near 70% of your overall limit. Buying something like that is going to be a lot more affordable. So, you’re not going to feel stressed about the payment each month. Living somewhere feels a lot better when you’re not worried about the payment.

Getting a Preapproval

The first thing you’ve got to do when you’re buying a home is getting a preapproval. This is a letter you’ll receive from the bank telling you that you can take out a loan. You can use it while you’re looking at homes to make an offer. By using it, the seller will understand you’re a serious buyer.

Making an Offer

To make an offer, it’s best to work with a realtor. They’ll be able to include everything you need to make an offer official. Just give them your pre approval letter to begin. Look around at as many different homes as possible while you’re shopping. Looking at a lot of them makes it easier to pull the trigger once you’ve found one you love.

The Closing Process

Do you know how long to close after conditional approval? If not, you probably want to work with someone experienced. The closing process is what takes the longest when you’re buying a home. Different types of mortgages have various closing times. Some of them might take as long as 90 days before they’re fully processed. Many of them close much faster than that, though. Working with someone who understands the closing process can speed things up, too. Make sure you’ve done everything properly during the close. Otherwise, something could stop it from happening. Waiting for another inspection feels like it takes forever when you’re ready to move into a new home.

Different Types of Mortgages

Speak with a lender to discuss all the different mortgage options they’ve got available. Some of them have different requirements than others. Even if you don’t have a massive down payment, you may still qualify for a mortgage. You can find them with lower down payment requirements than normal, some as low as 3.5%. Picking the right mortgage can make life a lot easier when you’re looking for a home. It can help people buy homes even though they didn’t think it was possible.

Buying a Home for the First Time

Becoming a homeowner doesn’t take as long as you think. With the right lender, you could be in a home within 30 days. Pick the right loan, so it’ll close faster. That’s definitely going to speed up the process while you’re waiting to close on a home.

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