Dreams Do Come True!
- Get pre-approved for a mortgage loan
- Shop for the perfect piece of land
- Call Archival Designs and allow our home plan specialists to find the perfect house plan that will make your family happy. Archival Designs will work within your budget to get you the best value and size home.
Check Credit History
Credit history is a record of how a person replays debts. Future home buyers need to take a few minutes to pull their credit report and order credit scores. Credit reports give homeowners a greater understanding of whether their scores are high enough to qualify and where they may need improvement. Additionally, credit reports can highlight issues such as identity theft.
Credit scores and activity play a major role in mortgage approvals. New homeowners can improve low credit scores, or maintain high scores, by paying bills on time, lowering all debts, and consistently monitoring their credit report.
Lower Debt-to-Income Ratio
When applying for a new home mortgage loan, the lender will assess the home owner's debt-to-income ratio. This ratio compares how much a person owes each month with how much they earn. Lenders can then gauge the buyer's ability to afford a mortgage payment. Before submitting a loan application, buyers should reduce debt and avoid major purchases until after closing on the mortgage loan. This can include purchasing a new car, cosigning on someone's loan, or financing new appliances.
Keep Employment Stability
Similar to credit history, a buyer's employment history can play a large role in mortgage loan approval. Many lenders require proof of steady income and will request employment history for at least 2 years. Planning ahead and finding employment stability in the couple of years leading up to building a new house plan can help increases the chances of an approved loan.
Save. Save. Save.
Requirements for getting a mortgage loan vary depending on the type of loan applied for and the lender. On average, new home buyers will need at least a 3.5% down payment but are encouraged to aim for a higher down payment if they have the means. Saving up for a 20% down payment reduces the mortgage balance and will also alleviate private mortgage insurance or PMI. This means substantial savings per month. Many lenders will consider a down payment as an investment in the home.
Take Action and Plan
Planning and taking action before searching for a house plan design is emotionally and financially responsible. New homeowners should consider getting pre-approved for a mortgage loan to understand what they can afford. Pre-approvals not only include how much a buyer can afford but also provide the interest rate that will be paid on the loan. It is not uncommon for applicants to be pre-approved for more than they can afford, so it's essential to analyze personal finances and consult with a home builder to ultimately decide what type and size home will comfortably fit within the budget.