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Posted by Julie Shanks on 12/29/2019

For many individuals, the homebuying journey often begins with getting pre-approved for a mortgage. Because if a buyer has a mortgage, he or she can enter the real estate market with a budget in hand.

Ultimately, there are many signs that now may be the perfect time to apply for a mortgage, and these include:

1. You're ready to upgrade from an apartment to a home.

If you're tired of paying monthly rent for an apartment, purchasing a house offers a viable alternative. And if you get pre-approved for a mortgage, you can move one step closer to moving from an apartment to a house.

In most instances, a home offers a significant upgrade over an apartment. Many residences are available in cities and towns nationwide that offer more space than apartments. Plus, as a homeowner, you won't have to worry about dealing with a landlord.

2. You feel good about your credit score.

If you have a strong credit score, you likely are a great candidate for a mortgage. In fact, you may be better equipped than others to get a favorable interest rate on the mortgage of your choice.

Understanding your credit score is a key part of the homebuying journey. You can request a free copy of your credit report annually from each of the three credit reporting bureaus (Equifax, Experian and TransUnion). Then, once you find out your credit score, you can determine whether you are in good shape to pursue a mortgage.

3. A buyer's market is in place.

In a buyer's market, there usually is an abundance of top-notch houses and a shortage of buyers. This means a homebuyer may be able to get a wonderful deal on a house, especially if he or she performs a comprehensive house search.

To find out whether a buyer's market is in place, you should check out the prices of recently sold houses in your area. Also, you may want to find out how long recently sold houses were listed before they sold. By reviewing this housing market data, you can differentiate a buyer's market from a seller's market and decide whether now is the right time to apply for a mortgage.

If you're interested in getting a mortgage and starting a house search, you may want to hire a real estate agent too. Because if you have a real estate agent at your side, you can receive extensive support at each stage of the property buying journey.

A real estate agent will teach you everything you need to know about pursuing a house. He or she will offer insights into the local housing market and ensure that you can conduct a successful house search. And if you ever have concerns or questions along the way, a real estate agent is ready to respond to them.

Want to launch a home search? Get pre-approved for a mortgage, and you can take the first step to acquire your ideal residence.




Tags: Buying a home   Mortgage  
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Posted by Julie Shanks on 11/10/2019

In your quest to buy a home, you might check out properties online or looking up houses around your neighborhood up for sale. These are all steps you must first make to attain your desire of becoming a homeowner. Before you go into your search proper, there is something you need to do; itís called getting pre-approved for a mortgage. 

A mortgage pre-approval involves lenders going through your financial records to determine how creditworthy you are. Itís a process that allows the lender to go through your financial records to determine if you are loan qualified and how much you are eligible to borrow. Being qualified for a mortgage differs from being pre-approved Ė the latter holds more value to a lender. 

The purpose of getting pre-approved is to convince the lender that if granted the loan, you would be able to payback. Another reason lender asks for pre-approval is to be clear on all your financial situations. The pre-approval process involves lenders going through your financial records either on your request or at their discretion.  The following are things and documents you would be pre-approved about before applying for a mortgage loan.

Proof of Income

The documents showing your income statement is required to validate how much you earn on the average annually. Itís an essential document for pre-approval and underwriting. It involves you presenting your W-2 statements for the past two years, your most recent pay stubs (at least two) and any other additional source of income or bonuses. 

Proof of Employment

Aside from going through your pay stubs, a lender will also want to confirm your employment status from your employer and verify how much you earn. If the job you are working in is a new one, a lender might contact your previous employer. All these are procedures the lender undertakes to ensure they are borrowing to a financially stable individual. Self-employed people would need to provide more critical paperwork about their business. 

Credit Information

A lender would want to measure your debt-to-income ratio before granting you a loan. This procedure involves ascertaining if you are currently repaying any debt like a car loan, student loan or any other loan form. Providing documents relating to this information is vital.

Social Security Number

Lenders need your social security number to verify your identity, to attain your credit reports and also to request your tax returns from IRS. The information is made available through your social security cards, tax documents and all other documents showing your SSN.

Bank Statements

Your bank statement is required to determine if you have enough cash or investments needed to make a down payment, conclude closing cost and still maintain a cash reserve. Your bank statement is one of the essential documents nearly all lenders will request to see to ensure you have enough funds. 

The pre-approval process is the first place a serious homebuyer begins the home application process. Speak to a financial consultant or your real estate agent to help you secure one.




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Posted by Julie Shanks on 9/29/2019

Getting a new mortgage can be stressful, whether you are getting it for the first time or not. You have to carry out thorough research to avoid going into a mortgage that drains your pocket through high-interest rates. You can get yourself prepared for the lowest interest rate that is suitable for you by taking good care of your credit history. Do you realize that a difference of 1 percent in the interest rate can save a tremendous amount of money on a mortgage running for 30 years?Consider the following when searching for competitive rates:

Introductory rates:

You should consider loans with discounted initial rates. Be on the lookout for fees and be ready to switch in case the rate goes higher than your budget or plan.

Alternative lenders:

When looking for a low-interest mortgage rate, you should check if a smaller non-banker lender is providing a low-interest mortgage. When you find options, check properly to be sure that there are no additional charges. You must know the final amount before committing.

Variable versus fixed rates:

The difference between a variable and fixed rate is that variable loans usually advertise more flexibility and lower interest rates when compared with the fixed rate. However, the truth is that you can get a fixed-rate mortgage without any possibility of rising rates. Variable rates may tell you the percentage is likely to go down, but it can go up also! 

Negotiating a discount: 

After you have selected a mortgage company, inquire about their unadvertised discounts that can save you money.

Here are some tips to help you qualify for low-interest mortgage rates:

  • Get a loan with low fees. You should know that most mortgages have a separate charge that is different from the repayments and rates. Such fees sometimes are not included in most online loan comparison websites. Contact the company to be sure you have full information about one-time fees like application or origination fee as these may be expensive. Compare with other ongoing fees to be sure it does not cost you more in the long run.
  • Should you avoid fees at all costs? You do not always need to avoid fees. To know the amount that a loan will cost you, you should do the calculations and consider the benefits as well as the charges involved. If you discover that a mortgage loan has features that benefit you, it is justifiable to pay a small ongoing fee.
  • Save up a healthy down payment. It is worth noting that you are likely to borrow less to cover your home's purchase price if you have a substantial down payment. It is better to save enough funds towards your down payment.

Speak to your financial advisor or planner to know how to be pre-approved for the best mortgage rates before you start your house search.




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Posted by Julie Shanks on 12/30/2018

Perhaps one of the most challenging things about buying a home is saving for the downpayment. Collecting such a large sum of money can be difficult. The truth is that most buyers actually think that they need more than they actually do to buy a home. The downpayment doesnít need to be a barrier to your path to homeownership. There are so many programs that offer low and even no down payment home loans. Read on to learn more about down payments and programs that can help you. 


First, letís look at what a down payment is and how it can help you. If you put 10% down on a $200,000 home thatís $20,000. The downpayment minus the purchase price of the home is $180,000, and that's how much your home loan will be. The more money you can put down on the house, the lower your home loan will be and the lower your monthly mortgage payments will be. A large down payment can indeed save you in the long term. If youíre looking to move into a home sooner rather than later, saving a considerable sum isnít always possible.  


Low Downpayment Mortgages


You need to decide what type of home loan you need by the amount of downpayment youíre willing and able to put down. Some benefits go along with making a down payment, but there are some negatives. 


By making a substantial down payment you may despite your savings, leaving little money for emergencies. Your mortgage rate may not be affected by a large downpayment either. It can be hard to decide what type of loan to get and just how much you really can afford.  


FHA Loans


FHA loans are among the most popular type of home loans. The downpayment thatís required is just 3.5%. The requirements are simple, and you donít have to be a first-time homebuyer to qualify. 


The drawback to an FHA loan is that you cannot cancel the monthly mortgage insurance that comes along with it unless you refinance the home. Traditional mortgage insurance is canceled when you have built up 20% equity in the house, but this isnít the case with FHA loans. 


Another positive about FHA loans is that your credit score doesnít have to be stellar in order for you to qualify. Some lenders approve FHA loans with credit scores as low as 580. 


VA Home Loans


Buyers who have current or former military service status can qualify for this zero down mortgage. These loans are benefits to veterans and current members of the Armed Forces. While no downpayment is required, buyers may put down any amount they wish. The only requirements are that buyers be members of the military either currently serving for 90 days or two years of active duty service if not an active member.   


The above options are great for those who canít afford or donít wish to put down large down payments but still hope to be homeowners. 





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Posted by Julie Shanks on 11/25/2018

If youíve been considering taking the next step toward homeownership, youíve likely heard about FHA loans. Offered by the Federal Housing Administration (hence, ďFHAĒ), these loans are great for a number of people hoping to purchase a home but who donít have a large down payment saved.

There are many misconceptions about FHA loans since theyíre often advertised by large, private mortgage lenders but are technically a government program. In order to clear up some of the confusion, weíve provided answers to some frequently asked questions regarding FHA loans.

Read on to learn about FHA loans and how they might help you purchase a home.

Who issues an FHA loan?

FHA loans arenít issued by the government. Rather, theyíre issued by private lenders but insured, or ďguaranteed,Ē by the government.

Since lenders want to make sure theyíll see a positive return from lending to you, they typically want you to have a high credit score and a large down payment (typically 20%). However, not everyone is able to meet those requirements. In this situation, the FHA is able to help you acquire a loan by giving your lender a guarantee.

Are there different types of FHA loans?

Yes. In fact, there are nine distinct types of loans guaranteed by the FHA. These include fixed rate mortgages, adjustable rate mortgages, refinance loans, reverse mortgages, VA loans, and more.

What do you need to qualify for an FHA loan?

Itís a common misconception that you need to be a first-time buyer to qualify for an FHA loan. However, if you have previously owned a home that was foreclosed on or if youíve filed for bankruptcy, the foreclosure and bankruptcy have to be at least three years old.

Youíll also need to demonstrate a stable employment history, usually including two years of employment with the same employer.

Finally, the FHA will ask you for your current and previous addresses, the last two years tax returns, and the W-2 forms from any of your recent jobs.

What is the most I can borrow with an FHA loan?

The FHA sets mortgage limits on loans depending on the state and county youíll be living in. For a single-family home, the limit ranges from $275,000 to $451,000. So be sure to check the limits for your state and county.

Can you refinance an FHA loan?

Refinancing a loan is a great way to receive a lower interest rate or to shorten the term of their mortgage to save in the total number of interest payments. In fact, the FHA typically only allows refinancing when it will result in lower interest payments on a loan.

What is the minimum credit score needed to qualify for an FHA loan?

While you donít need excellent credit to qualify for a loan, the FHA will require you to have a score of at least a 580. You can check your score for free online from a number of companies, such as Mint or Credit Karma. Be aware, however, that scores vary between credit bureaus. So, itís a good idea to check your FICO score once per year, which is the score used by mortgage lenders.




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