Guide for When It’s the Best Time to Apply for a Mortgage

Guide for When It's the Best Time to Apply for a Mortgage

More than 2/3 of Americans are homeowners, and 40% of those homeowners applied for a mortgage to purchase their home. But not everyone who has a mortgage got the best deal because they didn’t apply at the right time. Like everything else, timing is everything when it comes to applying for a home mortgage.

If you are considering when is the best time to apply for a mortgage, this article will give you the answers you need. We’ll explore how to apply for a mortgage and when to apply for a mortgage to make sure you get the best rate and terms.

What Factors Affect the Timing of My Application?

Mortgage rates and terms fluctuate and are affected by a number of considerations. Here are some of the factors you should consider when submitting your application.

Credit Score

Credit scores are determined by a report from three different credit reporting agencies. Your credit score will be between 300 and 850. The closer your score is to 850, the more likely you will receive a mortgage and excellent terms.

People with credit scores below 580 will have a difficult time finding a mortgage company that will lend to them. To make sure the time is right to apply for a mortgage, get a copy of your credit score, and take steps to increase your score.

Income Level

Mortgage lenders look at your current income to determine if you can afford your mortgage. They also look at your income history to make sure you are likely to have a stable source of income for the life of your loan. If you haven’t been in your current job for at least two years, you are less likely to be approved.

So when do you need to apply for a mortgage? The best time is when you’ve had several years of steadily increasing income at the same employer to demonstrate you’re a strong candidate.

Down Payment

Most home mortgages can be secured with a small down payment. Keep in mind, the larger your down payment, the lower your monthly mortgage payments will be. And if you pay less than 20% down, you’ll likely have to pay for mortgage insurance. 

To get the best terms and manageable monthly payments, save your money until you can pay at least 20% of the cost of your new home up front.

When Is the Best Time to Apply for a Mortgage?

There are a lot of factors that can affect your ability to get the best mortgage. The right time to apply is when you have the highest possible credit score, stable income, and a healthy down payment. 

Purchasing a home is a significant investment, and you may want to enlist the help of a real estate attorney to help. Real estate legal services can help protect your interests as a home buyer and finalize your purchasing agreements.

Timing Is Everything

If you’re wondering when the best time is to apply for a mortgage, the answer is different for everyone. Some people have a solid credit history and a large down payment ready to go. Others will need to wait until they have a stable income and a longer employment history.

Working with a real estate attorney can help you identify issues that may prevent you from getting your mortgage. They can also assist with ironing out the details of your purchase and loan agreement. 

For more real estate tips and advice, explore the rest of our site.