While bitter snow still covered most of Massachusetts, some of us are already anticipating the starting bloom of the early-budding flower of the upcoming warm, breezy spring. We might still be in
5 Quick Tips To Get That Mortgage Approved
If this is the first time in purchasing a home or even if it has been a while, these tips may come in handy when it comes time to get approved for that mortgage. If brand new to the experience it can feel a little scary and overwhelming. A mortgage is different than a car loan, store charge, or credit card. Relax!! You are in good hands here. Most importantly the more educated about the process you become the easier and smoother it will go. These are 5 quick tips that you may want to start thinking about and getting into the habit of using.
Check out and get familiar with your credit score - This is a step that literary takes just minutes to do but is so crucial in the loan process. It is amazing just how many people don't know their credit score. Many people who apply for a mortgage have never checked their credit score prior to application. Sure fire way for something unexpectedly to show up and derail your application. Prior to application request your score from the 3 major credit bureaus. It is easy and usually free. From there you can identify if all the information there is correct and accurate. If it isn't, now you have given yourself the time to identify and correct any potential problems and saving you a ton of heartache. Another reason to check that credit history is identity theft. According to the Bureau of Justice Statistics(BJU), over 16.6 million people had there identities stolen in 2012 alone. Many problems were corrected in a day but a some took over a month to correct. Worse yet many had out-of-pocket expenses associated with the theft as well. Stay on top of it and know how the ratings work.
Save - When you go to apply for that mortgage there will be cost involved. Be ready, save the money, and plan out what you may need. Lenders are more cautious and not having anything to put down may leave you a little disappointed. Down payments will vary depending on lender and their criteria but on the average you will need at least a 3.5% down payment. The more you can put down the better and if you can put down 20% you can avoid PMI (private mortgage insurance). Plus there may be other costs as well, such as appraisals, home inspections, title searches, closing costs, application fees, and other similar expenses.
Your Debt-to-income Ratio - Pay down whatever debt you can. It doesn't have to zero but the less you owe the more comfortable the lender will be. Also it will effect how much of a mortgage you may be approved for. Total monthly debt payments should fall at about a little over a third of your gross monthly income, so if your debt is higher it may have a negative effect on the amount of your mortgage approved for. Also very important, pay down and don't add any major purchases. It may be tough not to buy all new appliances once you have your home picked out but wait till after closing. Lenders re-check your credit just before closing and big purchases can get your application rejected.
Keep things stable - Very similar to the previous step but it happens way more than you think. Remember the process is not over till after closing. People have gotten pre-approved for a mortgage and then decide for a career change. Ugh!! Timing is everything and that is not the time. Mo major purchases and no major changes.
Getting the Pre-approval - The pre-approval before shopping for the home is just plain smart. You will know how much you can afford, the interest rate, and all the important factors you need for this to feel right for you. Even with the approval thou, you may find out you were approved for more than you thought. Just know your monthly costs and stay inside your budget. Just because you could go for a higher amount doesn't necessarily mean you should.
Your Realtor can be a valuable source of information and advice to help you along the way. Many people are still recovering from these tough economic times. Your Realtor will be able to help guide through the whole process and connect you with the right people. Good Luck everyone and happy house hunting.
Latest Blog Posts
There are all kinds of benefits to downsizing in your golden years — lower energy bills, a smaller space to clean and maintain, and the potential of moving closer to loved ones are just a few.