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Updated by Fusion 360 on Nov 10, 2014
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Mortgage Management Tips for Young, Married Couples

The honeymoon has come and gone, and now it’s time to play the role of an actual functioning married couple in American society. Normally, that means applying for a mortgage. Whether looking to invest in real estate or a starter home, young, married couples often find themselves at a loss for how to handle their newfound financial responsibilities. Though the world of money management and mortgage companies can be an intimidating one, it doesn’t have to be if handled appropriately.

Maintain a Good Credit Score

Most people are unaware, beforehand, that mortgage lenders aren’t legally permitted to provide borrowers with advice as to how to improve credit scores. Making smart financial decisions early on in marriage will make the loan application process much easier in the near future.

Avoid Debt as Much as Possible

Not only will debt hurt your marriage’s credit score, it’ll also affect your debt-to-income ratios (DTI ratios), thus making it all the more difficult to purchase your first home. DTI ratios are an important factor when applying for a mortgage. Eliminate debt and expand your home ownership potential.

Save Money for Future Down Payments

Simply put, the more money you can initially put down, the greater the likelihood that you’ll qualify for a home loan. Much like DTI ratios, loan-to-value ratios play a tremendous role in mortgage qualification.

Be Realistic About Your Financial Situation

Any one of America’s many mortgage companies would be willing to talk with you and your spouse of financial reality. Honesty is not only important within the confines of marriage, but when dealing with finances as well. Just because a bank thinks you can afford a more expensive home, doesn’t mean it’s true. Homes don’t take care of themselves, and hidden expenses should’t be much of a surprise.

Establish an Emergency Fund

As a general rule of thumb, it’s widely suggested that three to six months of living expenses be set aside for an unfortunate event such as unemployment or a sudden increase in medical fees. “Preparedness” isn’t necessarily the name of the mortgage game, but it very well could be.

Understand the Importance of APR

Annual percentage rate, or APR, is a numerical calculation as to the state of your current interest rate. When shopping for a home loan, lenders often bait the unsuspecting with low interest rates, planning to make up for them with high fees. The key is to compare annual percentage rates between mortgage lenders to see which is really the most affordable.

Document Finances

With mortgage companies, lenders are constantly under pressure to ensure that borrowers will be able to repay their loans as scheduled. Tax returns, W-2 forms, bank statements and any large deposits will be necessary to both present and explain as you apply for loans.

Stay Calm and Don’t Panic

Mortgage companies are predicting a spike in mortgage rates for 2014; however, that’s no reason to panic. Buying real estate or a new home is one of the biggest decisions that you and your spouse will ever make. Move swiftly, but if the right buy doesn’t come along, there’s no shame in waiting.

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Lucas Miller writes for Castle & Cooke Mortgage (Nmls# 1251). He is a writer at Fusion 360, an advertising agency in Utah.

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