‘The money part’

How to navigate the all-important home mortgage process

It’s time to find a place of your own, and making sure you have the right information about getting a home mortgage is the best starting point, even before finding your actual dream house.

By making sure your finances are in order in advance, the homebuying process can be seamless, so be prepared before diving in.

Clay Bohannan, senior residential mortgage loan originator at Encompass Lending Group, said if you’re looking at buying a home, the smartest thing to do is to get prequalified to determine the amount a of loan you can qualify for.

Vital information such as credit, determining qualifying income, calculating debt-to-income ratio and down payment requirements all come into play when making initial contact with a lender.

“The prospective borrower should know how much they can afford, and only the home buyer really knows how much they are comfortable in spending each month for a mortgage payment,” said Bohannan.

On Investopedia.com’s article, Are You Ready to Buy a House?, buyers also need to consider their front-end debt-to-income ratio. According to this, lenders like that ratio to be no more than 28 percent.

Michelle Murray, a Realtor with RE/MAX Compass, said getting preapproved is extremely important.

“Sometimes the buyers think they can get a $300,000 to $400,000 home, and the letdown is tremendous,” Murray said. “It’s very important to do this in advance because if you like a home, you have a stronger offer.”

Bohan n said figuri g out how much one can afford for a home purchase involves a rule of thumb — about one about one-third of your gross monthly income — to determine your maximum homeloan payment.

“However, their other monthly obligations might impact that am as more of their income is spe pay for other debts.

Again, the borrower know how much they

Qualifying is totally

Bohannan said.

High on the list of for your mortgage also having good credit. Mur some crucial tips, such as credit cards with small bala paying your credit cards befor due date.

“It’s the little things. Medical bills can come back and bite you. Right before closing, they can knock you out of getting a house. Address them beforehand,” Murray said.

Bohannan also said that credit scores are critical for qualifying for a mortgage loan.

“The higher the credit scores, the better the interest rate the creditor will offer,” he said. “Paying bills on time and ke ing revolving credit balances low re ative to the credit limit are most important. … The most weight in the mortgage-scoring model is tied to creditors being paid on time and having available credit on revolving accounts.”