Are you ready to buy a home? For most people, that means applying for a mortgage. But what can you do to prepare for the application process? How can you make sure you get a mortgage with the best possible terms? Fortunately there’s quite a bit you can do before you apply. Mostly, it comes down to:

• Gathering information and learning about your options
• Getting your credit in order ahead of time
• Understanding your financial situation and making a budget

Let’s look at each of those points in more detail.

Gather Information

Check current rates.

This form lets you fill in some basic information and get a personalized quote. Doing this will help you plan and budget as you get ready to apply for your mortgage.

Get your questions answered.

Centennial Lending (one of our incredible partners) has an organized list of frequently asked questions. If you don’t find the answer to your question there, get in touch with our member service representatives and we’ll be happy to help.

Learn about loan options.

There are many types of mortgages to choose from. You may have heard people mention “FHA Loans,” “VA Loans,” or “Bridge Loans.” You’ll find a list of these loan options and more on our website with descriptions of each.

You may also have the option of a fixed rate loan or an adjustable rate loan.

A fixed rate loan means your interest rate is locked, so you know exactly how much you’ll pay each month.

An adjustable rate loan starts with a lower interest rate, which may increase along with market values.

Check Your Credit History and Credit Score

Your credit can affect your mortgage loan eligibility. Many lenders look at your credit history and current credit score when you apply for a loan. You can prepare for this process by finding out all you can about your current credit situation and boosting your credit score where you can. Here’s how:

• Check your credit score. Your credit card company or bank may provide credit scores to customers free of charge. At Valley Credit Union, we are always happy to help members determine their credit scores.
• Request a report of your credit history to make sure there are no mistakes and no incorrect information that could be lowering your score. You can do this at  www.annualcreditreport.com or by calling 1-877-322-8228.

If you still have some time before you’ll be applying for your mortgage, you can also boost your credit score in the meantime by paying off as much debt as you can, whether it’s credit card debt, a student loan, an auto loan, or other mortgages. The most important thing you can do is to pay all your credit card bills on time and keep your balances low.

Additionally, as Equifax suggests, you should avoid opening new lines of credit in the 6 months before applying for a mortgage, and don’t close any older accounts that are still active--they demonstrate credibility to lenders.

You should register to vote as well. It’s the way most lenders prefer to confirm your address.

Make a Budget

Before you apply for a mortgage, it’s good to know how much you can spend on a down payment and on subsequent monthly payments. You can estimate your monthly payments for a variety of scenarios using Centennial Lending’s online loan calculator.

A solid understanding of your financial situation will help you decide what type of loan is right for you.

Apply Online Today

Valley Credit Union partners with Centennial Lending to offer our members a variety of excellent mortgage options with competitive rates and flexible terms. We want to make the application process as stress-free as possible, so all you need to do is apply online, and we’ll handle the rest. We also offer pre-approvals.

If you have questions or concerns about mortgage options, we’re here to help. Contact us today to get all your questions answered.

About the Author

 Justin Roberts, Vice President of Lending

Justin Roberts is our Vice President of Lending and has been in the financial industry for over 18 years. He is an Oregon State University Graduate and has just completed Western CUNA Management School. When he is not focused on helping the members at Valley, you will find him coaching his two sons and volunteering his time to help develop the youth in our communities through sports.