If you think that you want to buy a house someday, the time to start planning is now. That doesn’t mean that you should start figuring out what school district you’d like to move into or whether you’ll need a second bathroom. Instead, your first planning step should be focused on getting your financial life in order. The sooner you get started on making sure that you have a solid financial history to show to lenders, the better your chances will be of getting the best tier of Mortgage Rates that they are able to offer.
Any time a bank makes a loan, they base the interest that they charge on how risky they feel you are as a borrower. This isn’t a personal decision that someone makes following an interview. Instead, they look into your credit history to see how you have behaved in the past. The theory is that the best predictor of what you will do in the future is probably the way that you have behaved in the past. If you have been late with payments in the past, have had accounts sent to collections, or have other big issues that signal an unstable financial life, they’ll be more reluctant to loan to you and will charge a lot more interest if they do offer a loan.
By beginning to get ready early, you can make sure that you have a financial history that looks as favorable as possible. Some of the decisions that you should be making are obvious; it’s important to pay all of your bills on time. Some of them are a lot less obvious. If you don’t already have a credit card account, for example, you should try to get one. Yes, paying for everything in cash is financially responsible. However, the bank wants to see evidence that you can handle loans and credit responsibly.
Even if you don’t know when you’ll be ready to buy a house, building a solid credit history is a good move. It can make it easier for you to do other things as well, like getting a job or renting an apartment. When you are ready to buy your own home, Village Mortgage will be happy to work with you on putting together a loan package that’s a good fit for your needs, and offers the best possible Mortgage Rates as well.
©2014 Village Mortgage Company, NMLS #6331 , CT #6331, RI #6331, Mortgage licensed lender in MA ML6331. This is not an offer to extend credit to any individual who may be entitled to a more complete disclosure per RESPA, TILA, HOEPA or any other more applicable federal, state or local law or regulation. Rates, terms, fees, products, programs and equity requirements are subject to change without notice. Village Mortgage, Equal Housing Lender.
