Issue link: https://nest.uberflip.com/i/1165053
STEP 1: Shop for a Mortgage B efore you start shopping for homes, you should shop for a mortgage. Many first-time buyers wait until they've found the perfect home to start shopping for a mortgage and looking at mortgage rates—and that's a mistake. The reason: All lenders are a little bit different, so it pays to compare the loans they're offering in terms of interest rates, closing costs. This is a good time to decide whether you want to apply for a fixed-rate or adjustable- rate mortgage loan. This step will also help you pinpoint any concerns lenders might have with your loan application, and give you time to fix these flaws so you're in great shape to make an offer once your dream home does come along. You'll also want to check your credit report before you go much further. If your credit score is less than excellent, or even if you have bad credit, you have work to do before you can qualify for a loan with a favorable interest rate. You can take some steps (e.g., paying down loan amounts and possibly increasing credit card limits) to improve your credit score quickly. If your credit report shows more problems, however, you may need to spend several months to a year working on your credit score before you try again to get a mortgage. Step 2: Get Mortgage Pre-approval T he goal of meeting with a mortgage lender is to get pre-approved for a mortgage. During this process, the lender will probe your financial past and check out your income, debts, and other factors that help it determine whether or not to give you a home loan—and how much house you can afford to buy. Getting pre-approved is critical if you want your home-buying efforts to succeed. Why? Because a pre-approval letter from a lender shows home sellers that you have the financial backup necessary to buy their home. Without it, sellers have no guarantee you can afford their place and, in many cases, won't take you seriously. Don't confuse pre-approval with getting pre-qualified. To pre-qualify, a borrower basically GE ING PRE-APPROVED IS CRITICAL IF YOU WANT YOUR HOMEBUYING EFFORTS TO SUCCEED.