5 Essential Tips to Preparing for a Mortgage Loan

Mortgage loans are not easy to apply for since lenders look at every detail of your financial history. You have to be ready for the tons of requirements creditors might ask for. Before you start going to loan offices, here are some of the things you need to be prepared for.

5 Things to Prepare for When Getting a Mortgage Loan

1. Understand Your Credit Report

Lenders are only willing to lend that much money to those with good credit scores. Depending on what type of mortgage you apply for, you will need to have good credit and no other financial obligations weighing you down.

When you understand how the credit report system works, there may be a few things you may spot on your credit report that you can dispute. If those issues are in favor of you, then you might see your credit score go up just a bit. Another thing that a credit report can tell you is what is weighing you down the most. See if you can make payments on those before taking out a mortgage or other big loan.

2. Don’t Settle, Do Your Research

Once you’ve got your finances in check, it’s time to find the perfect creditor for you. Don’t just go for the first thing you see on the internet. The first few links are most probably paid ads made by the mortgage company, which aren’t necessarily the best option for you. 

Compare and contrast companies and understand their policies before making a deal with them. That way, you won’t regret signing a contract binding you for years and years. 

3. Stay Realistic

Don’t go chasing after rates you can’t afford. You need to consider your financial stability and capability in the years to come. If you can afford to pay rates at a 15-year mortgage payment plan, then take it. A shorter time means paying more monthly, but it allows you to own your house sooner than a 30-year mortgage. Also, consider if you want a fixed mortgage or one that’s a little more flexible in case inflation rates jump up and down in the following years. 

4. Prep for a High Down Payment

The higher the down payment you make, the lower the rates are every month. Financial experts suggest that you should put out a higher down payment to save yourself future trouble. If you haven’t saved enough yet, it’s best to wait just a bit longer until you take out that mortgage.

5. Weigh the Perks and Penalties 

Every good thing about a mortgage plan comes with a consequence to match if worse comes to worst. While you may be confident in making payments on time now, you’ll never know what happens five years down the road. You need to find a service that also shows a little grace and has reasonable policies when things go wrong. 


When you do try out for a mortgage and don’t meet the standards lenders are hoping for, don’t be discouraged. “Not now” doesn’t mean you won’t ever be approved. Your economic status can always change in a couple of months or years. And when it does, there are many types of mortgage loans to apply for with less strict rules at more affordable prices.  

Ready to pull out a home loan? Sacramento mortgage rates can vary depending on where you go. Hawkins Home Loans offers incredibly low rates and amazing services for the folks looking to buy a home, refinance their mortgage, or need cash from their home equity. Contact us now for a stress-free application.