I am sure I am not telling you something that you don't already know, but when applying for a
mortgage here are a couple suggestions that you should be aware of:
1.) Educate yourself on the mortgage. Don't plan that in 5 years, 7 years or 10 years you or your spouse will be making more money or your financial situations will take a change for the better. Plan on what you can afford today, and set aside at least 3 months worth of money in reserves for that "rainy day". Alot of borrowers that I know, have said to me "Well, Bill will be getting a big raise next year, so we just have to worry about this year - but next year, he will be making almost double". Guess what, Bill never got that raise, instead he got a severance package offered to him. So don't plan on the unknown.
2.) Stay away from any "creative" financing. If you are taking an interest only or a very "creative" mortgage because you can not afford the home at a 30 year fixed, then you should reconsider your purchase.
3.) Reduce! Reduce! Reduce - Having too much credit is probably almost, if not worse than having NO or BAD credit. When you have excess amounts of credit available to you the banks worry that at any point your can become charge happy and wind up in financial disarray.
4.) Prepare. When applying for the mortgage, you need to have money in reserves. So in addition to your down payment, your closing costs and your various other fees, the banks want a certain amount of money available in reserves. You need to have that in the bank before closing (Usually 2-3 months of reserves are requested).
5.) Read your commitment letter. Make sure that the rate, the terms, and the amount that you are borrowing are all correct before signing the docs.
Just as a side note, I am not a mortgage broker and I don't play one on T.V either. In the last few years, people took "Piggy-Back Mortgages" - to avoid the PMI insurance, but with rates slowly creeping up and may continue do do so - you might want to consider not going that route. Your mortgage broker (if they are good/honest) can help you further with this. This is something to consider when you are buying with less than 20%.
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