Mortgages: What You Need To Know

​Are you nervous about buying your first home? Well no need to fear because moneybuddy is here!.... to help walk you through this intimidating process.

Buying your first house can be something very intimidating to think about. But if you do your homework and get prepared, the process will be easier than you first thought. Follow these next 5 steps to make your homebuying experience smoother.

1. Make sure to check your credit

Your credit score needs to be in good standing to qualify for a mortgage loan. If you wish to proceed in buying a house make sure your good on this end.

2. Track your monthly spending and debts

If you are a first-time homebuyer and wanted to do everything right, you should probably start by track your spending for a couple of months just to see where all your money goes. Also, your should include knowledge of what you currently owe and provide proof that you are making payments.

3. Organize important financial documents

You are going to need to show proof of financial documents such as taxes. Mortgage lenders are usually going to ask for recent paycheck stubs, W-2s from the previous two years, tax returns and bank statements. Essentially, mortgage lenders are going to want proof of your ability to responsibly handle a big loan like a mortgage.

4. Figure out how much you can afford

You are a first-time homebuyer so you should know already how much you're able to afford to spend. Your mortgage lender will tell you how much you can afford after reviewing your information but it's a good idea to know beforehand and prepare yourself.

You can use this "How Much House Can I Afford?" calculator I found online to determine how much mortgage you can handle with your budget right now.

5. Come up with a down payment

Next you need to figure out were you're going to scrape up enough money for a decent down payment. The higher your payment is, the better your chances are of getting approved for your loan. So it's a good idea to start saving a few years back!

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