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How to Navigate the World of Mortgages as a New Graduate: Tips and Strategies

Graduation marks the beginning of a new chapter in life, filled with exciting opportunities and significant decisions. One such decision is purchasing your first home, which can be both exhilarating and intimidating, especially when it comes to navigating the mortgage process. This article provides helpful tips and advice for new graduates to prepare for their first mortgage experience.

Build a solid credit score

Your credit score is a critical factor that lenders consider when evaluating your mortgage application. A higher score increases your chances of approval and secures more favourable loan terms. To improve your credit score, make sure to:

  • Pay your bills on time;
  • Use 30% or less of your credit limits;
  • Dispute any errors on your credit report;
  • Avoid opening multiple new lines of credit simultaneously (but if you currently have only one credit card, consider opening a new credit card);
  • Do not close your credit card, even if you are not using it.

Our team has a great article that will help you maintain and improve your credit score, check out - Credit Clean-Up Before Going For Mortgage

Save for a down payment

While it is recommended to have at least 20% down to avoid Mortgage Default Insurance, you still can purchase property with less than 20% down payment. Lenders typically require a down payment ranging from 5% to 20% of the home's purchase price. Start saving early and consider:

  • Setting up automatic transfers to a dedicated savings account;
  • Cutting back on discretionary spending;
  • Exploring first-time homebuyer assistance programs and accounts.

Saving can be tough, especially if you have to pay back for a student loan. We have created an article that will help you set the goal and achieve it by adapting some princeples - Tips for Saving for a Down Payment on Your Dream Home

Get pre-approved for a mortgage

Obtaining pre-approval for a mortgage offers a competitive advantage when hunting for a property, as it informs you of your borrowing capacity and helps you establish a realistic budget. To get pre-approved, you will need to provide our mortgage agents with information about your:

  • Income;
  • Employment history;
  • Credit score;
  • Assets and debts.

Do you want to know what to expect from your mortgage process? Check out our article - What’s Next? The Mortgage Process in a Few Simple Steps. We also encourage you vising our comperhansive FAQ page were you can find answers to the most common questions - FAQ Page.

Prepare for additional expenses

Homeownership entails more than just mortgage payments. You will also need to budget for:

  • Property taxes;
  • Homeowners' insurance;
  • Maintenance and repair costs;
  • Closing costs and fees.

See other common expenses when it comes to the closing - What Closing Costs Should Home Buyers Expect?

As a new graduate, preparing for your first mortgage may seem daunting. However, by building a strong credit score, saving for a down payment, understanding various mortgage options, and working with experienced professionals, you can successfully navigate the process and make informed decisions on your path to homeownership.

If you are ready to take the next step towards securing your first mortgage, IK Financial is here to help. Our experienced mortgage agents can guide you through the process, answer your questions, and help you find the best mortgage option to fit your unique financial situation. Do not wait any longer to start your journey towards homeownership. Register for a call with IK Financial today and take the first step towards achieving your dream of owning a home.

IK Financial Mortgage Team operates on behalf of Mortgage Edge. Lic#10680

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