When it comes to buying a home and applying for a mortgage a lot of preparation is required.  It is simple not something that is done on a whim.  Mortgage rates are ever fluctuating and as of recent months we have seen some of the lowest rates in a long time; this leads new home owners to pursue their option in refinancing and sparks the interest of first time home buyers.  If you are new to the mortgage industry it is important that you have a basic understanding of what you are embarking on.  The process of securing a mortgage does not happen overnight and requires hands on approach from both the home buyer and the lender.

The first step involved in refinancing or securing a mortgage for a new home purchase is to determine your current credit score.   In order to get the best rate available on a mortgage you need a stellar credit rating.  You want to personally review your credit report and look for areas of inaccuracy.  Make sure your score is where you want it to be before you seek lending.

If upon reviewing your credit report you see inaccuracies it is important that you report them and get them updated.  Disputes need to be addressed with all three credit rating bureaus.  This process may take some time but is a crucial step to assure your credit report accurately reflects your financial situation.  Now is the time to evaluate your debt to income ratio as well.

Your mortgage payment will be one of the main sources of debt that you will acquire in your lifetime.  It is important to research the different home loans, rates and lenders available.  Depending on your situation you may be able to qualify for special financing.  Examples of special financing options available are for veterans, first time home buyers and self employed individuals to name a few.  Before you sign anything or commit to anyone research your entire lending options as well.  You may choose to work with an individual lender or a mortgage broker.  These options are up to you and are a matter of personal preference.

Being pre-approved and knowing what you comfortably can afford are two very different things.  Be realistic in your desire for the American dream.  You may be pre approved for a loan of up to two hundred thousand dollars however might not be comfortable with the monthly payment that comes along with it.  If you not only want to own a home but want to travel and have a life outside of your home take those financial commitments into account when budgeting for a mortgage.

There are several options in regards to the terms of financing available for new home loans and refinancing.  Research your options and determine if you are going to look into a fifteen or thirty year mortgage.  Are you looking for a fixed rate or an adjustable rate?  If you are looking for security and a guaranteed payment a fixed mortgage is your best option where if you believe rates could fluctuate and you want flexibility you may consider an adjustable rate mortgage.

Homeownership is a big step.  Financing it is an even bigger step that is often overlooked.  Be sure you take time to understand the steps involved and ask questions to clarify any and all matters before ever signing on the dotted line.  When working with a reputable lender or mortgage broker this shouldn’t ever be an issue.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.