Buying a home this year? Then you have no doubt waded through the loan borrowing process, which can be quite the journey if you are just starting out.
So as mortgage rates remain historically low, homebuyers seeking a conventional loan might need some extra pointers on the borrowing process.
In this post, we’ll give you some easy tips for seeking out and acquiring a mortgage, no matter what stage of the home buying process you are in, including what not to do before you apply for a loan.
Down Payments and PMI
You’ll have to pay for premium mortgage insurance (PMI) if your down payment is less than 20 percent of the principle. But keep in mind that you can negotiate PMI costs to as low as 3.5 percent through conventional mortgages loan services, all without doing a less than appealing FHA loan. This is a big financial savings in the long run and allows borrowers to avoid costly FHA PMI fees.
Maintain Good Credit
Obviously, getting a home loan with good rates relies heavily on your credit rating. But what people often forget is that it’s also appealing to lenders that you don’t have any red flags on your credit report leading up to the borrowing process. So in the months before your loan application, don’t open or close cards and don’t buy new vehicles. These aspects are applied to your debt-to-income ratio, which is a huge factor for loan amount consideration.
Stable Bank Accounts and Investments
Lenders look at many things pertaining to your financial situation when it comes time to borrow. One overlooked aspect is how you manage your bank accounts, and whether you are cashing out CDs, stocks, or bonds. So for at least six months before you borrow, try to leave all financial attributes largely untouched. In doing so, you will eliminate a huge headache when it comes time to file the paperwork.
For more information on how we can help you, please contact us anytime.