As the post-pandemic housing market booms, Millennials are buying homes at record rates. If you’re a younger person getting ready to buy a house for the first time, though, there are some things you need to know first. Here are three things all millennials should keep in mind when applying for their first mortgage.

Your Existing Debts Could Count against You

Mortgage lenders look carefully at the ratio of your total debt to your income when deciding whether or not to lend to you. If you have large debts, such as student loans or excessive car loans, you could have trouble getting the mortgage you want. Clearing up some existing debt first will lower your debt to income ratio and make you a more attractive credit risk.

You Should Try to Avoid Adjustable Rate Mortgages

Although they may seem attractive, adjustable-rate mortgages can leave you paying more later on unexpectedly. Work with a good fixed-rate mortgage provider like Right Trac Financial to get a good rate on a fixed-rate mortgage. By doing this, you’ll be adding more stability to your finances going forward.

You Don’t Need a Perfect Credit Score

Many first-time homebuyers believe they need to have credit scores of 750 or more to buy a house. The truth, though, is that you can buy with a much lower credit score. To get an FHA loan with a minimum down payment of 3.5 percent, for example, you will only need a score of 580. For a conventional mortgage, a minimum score of 620 is usually required. So, even with imperfect credit, you can still buy a house if you’re able to demonstrate good income and a low debt ratio.

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Your Lender Will Expect You to Have a Reserve Fund

One factor that trips up many Millennial buyers is the need for a reserve fund of cash. Lenders want to see that you have savings beyond your down payment that will allow you to pay in the event of a lost job or emergency expense. Build up a basic emergency fund of 3-6 months of your normal expenses, and you should have enough to satisfy most lenders.

While getting a mortgage isn’t exactly easy, you’ll find the process a bit simpler to navigate with these pieces of information in mind. Remember not to rush into a home loan, even if you seem to have an attractive offer. Getting a mortgage is a major financial decision, and you should always make it carefully.