Things you need to consider before taking a mortgage

It’s harder to qualify for a mortgage loan these days. New regulations require lenders to verify every aspect of a borrower’s financial background, before making the loan.

As a borrower, you should avoid doing anything that might harm your chances of getting approved for a loan.  Learn what to do before applying for a mortgage.

Credit score

A mortgage is a big responsibility. The bank risks a lot of money and must be cautious in giving out loans. A good credit score will be a plus in getting a mortgage.

Your Budget

Mortgage lenders want to make sure you don’t borrow too much. They look at how much your mortgage payments are relative to your income, ensuring you can pay. Run your own mortgage calculations to understand what you can afford.

First-Time Buyers

If you’re a first-time homebuyer, you may qualify for a special mortgage. Sometimes these are extremely valuable, and sometimes they’re not. Make sure you are familiar with these programs and restrictions on these mortgages.

Other Mortgages

There are a wide variety of mortgage options out there. You may find that some of the most creative ones (like interest-only, negative amortization, and adjustable-rate mortgages) work best for you. These mortgages might work for self-employed individuals with unpredictable (but sufficient) income, real estate investors, and buyers with a specific plan that fits these loans. However, you can also get yourself in trouble, so it pays to learn about the risks of each type of mortgage.

Second Mortgages

A second mortgage allows you to borrow against the value of your home. You can get access to a large line of credit with an attractive rate, though there are some pitfalls.

Down Payments

It’s possible to get a mortgage without a 10 percent to 20 percent down payment. Some people get a mortgage with no money down. There are a few legitimate programs allowing you to get a mortgage with very little down. Get acquainted with some of the safer mortgage programs out there.


There may come a time when you can get a better mortgage. Perhaps mortgage rates have changed, or your credit improved. Refinancing a mortgage is a powerful move when done for the right reasons.