How to Get a Mortgage: The Beginner’s Guide

Learning how to get a mortgage can feel like an uphill battle, especially if you’ve never done it before. Luckily, it doesn’t have to be nearly as difficult as it sounds. In this article, we’ll give you the beginner’s guide to learning how to get a mortgage.

How to Get a Mortgage 101

To purchase a home, you’ll need a mortgage. A mortgage is a loan that gives you the funds needed to purchase a home and defines a payment schedule and interest rate for you to pay the funds back. While some people wait to get a mortgage until they start searching for homes, it’s generally a good idea to start thinking about getting a mortgage before you start looking at homes.

As a general rule, mortgages for first-time homebuyers are easy to secure. While banks want to see that you have good credit, a solid income, little debt, and some money saved, people who meet those requirements generally have little trouble getting a mortgage. Here are the steps you’ll have to take to secure your own mortgage:

1. Add up your income and debts

To apply for a mortgage, you’ll need to know how much you make and how much you owe each month. Compile your pay stubs from the last three months if you’re employed by someone else, and be prepared to supply your last two years of tax returns if you’re self-employed.

Be advised that the amount of mortgage you can get approved for boils down to how much your debt-to-income ratio works out to be. Once you’ve compiled all your pay-stubs and accounted for your monthly debts, you’ll need to sit down with a mortgage lender to figure out how much you can qualify for.

2. Understand your credit score

To get a mortgage, you’ll need to know your credit score and your credit history. Obtain both of these before sitting down with a mortgage broker. For best rates, your score should be between 680-700. If it’s not at this level, consider working on your credit before you apply.

3. Get pre-approved

Before you start searching for homes, get pre-approved for a mortgage. This gives you the upper hand on the competition and ensures that you’re ready to jump on the house that you love when it becomes available.

Learn How to Get a Mortgage Today

Learning how to get a mortgage isn’t as difficult as it sounds. Being prepared and finding a good mortgage broker can go a long way toward ensuring great rates and helping you find a home you love.