21
Oct
By First Rate Financial Group
Home Mortgage Tips

Buying a Home? 4 Steps You Can Take to Ensure You Start out with a Low Monthly Mortgage Payment

Buying a Home? 4 Steps You Can Take to Ensure You Start out with a Low Monthly Mortgage PaymentAre you thinking about buying a new house or condo? If so, you’ve likely given some thought to your mortgage and as to how you can pay as little as possible in order to own your new home.

Below we’ll share four easy steps that you can take to ensure you start out with an affordable monthly mortgage payment.

Make A Large Down Payment On Your Home

The easiest way to reduce your monthly payment is to invest as much as possible in your down payment. The less you have to borrow, the less you’ll be required to pay back.

If you can put a sizeable amount down on your home you’ll find that your monthly payments are going to be very manageable. You’ll also save a lot of money in interest.

Maintain A High Credit Score

When a lender assesses your financial history they’ll take an in-depth look at your credit score in order to determine how much risk you present to them. If you’ve kept a clean credit rating and have a high score, it’s likely that you will qualify for a lower interest rate than someone with a lower credit score – even if you both have the same monthly income.

Buy A Smaller, More Efficient Home

When you’ve made your short list of homes and you’re scheduling your viewings, ask yourself – do you need a home this big, or this expensive? If you can do with a smaller, more efficient home you can reduce the amount of mortgage financing that you require and this will in turn reduce the amount that you need to pay each month.

Consider A Longer Mortgage Term

Finally, if you need to reduce your monthly payment at any cost you can stretch out your mortgage repayment period by a few years. Note that while this can reduce your payment amount it will actually increase the total amount that you end up paying back as you’ll pay more in interest.

While the above are general tips for reducing your mortgage payment, it’s likely that there are other strategies that are unique to your financial situation. Contact your local mortgage professional at your convenience and they’ll be able to share insights that are relevant to your income, your credit and the price range you’re looking to buy into.

14
Oct
By First Rate Financial Group
Home Mortgage Tips

Have You Had Trouble Getting a Mortgage? Three Tips for Sprucing Up Your Credit Before Reapplying

Have You Had Trouble Getting a Mortgage? Three Tips for Sprucing Up Your Credit Before ReapplyingIf you’ve had some trouble getting approved for a mortgage recently, you’re not alone. Many individuals face mortgage challenges due to past blemishes on their credit reports or a personal financial crisis that resulted in bills not being paid on time.

In this post we’ll share three quick tips for sprucing up your personal credit before reapplying for a mortgage. With a bit of luck and hard work you can be on your way to purchasing that new dream home.

Pay Off Your Credit Cards And Lines Of Credit

The easiest way to improve your credit score and prove that you can afford your mortgage payments is to eliminate other forms of debt from your monthly budget. If you have outstanding credit card, student loan or other debts, get them paid off as quickly as possible.

You’ll also want to avoid taking on any new loans while you’re trying to get your mortgage approved as these are likely to show up on your credit report and can hurt your chances at approval.

Pull Your Credit Report And Look For Errors

If you haven’t seen your credit report recently, it might be worth investing in a copy so you can see exactly what your lender sees when they are evaluating you for a mortgage. You may discover that there are errors or inaccuracies that can be cleared off with a quick phone call, such as a past loan that was fully paid or a missed car payment that was reported in error. Every credit report error that you can fix will bring you one step closer to your mortgage approval, so spend a few minutes combing through your report.

Pay All Of Your Bills On Time

Did you know that every overdue bill can leave a negative mark on your credit report? With so many bills to juggle – credit cards, cell phones, utilities and more – it can be tough to keep them all organized and paid before the due date. However, if you’re working to secure a mortgage you must keep your bills paid to avoid being reported as a late or overdue payment.

If you’ve had some trouble getting approved for a mortgage in the past, take a few minutes to contact your local mortgage professional today to ask for their advice. You may find that they have additional tips and strategies that you can leverage to better your chances of being approved.

23
Sep
By First Rate Financial Group
Home Mortgage Tips

A Step-by-Step Guide to Preparing Your Finances for the Mortgage Pre-Approval Process

A Step-by-step Guide to Preparing Your Finances for the Mortgage Pre-approval ProcessBeing pre-approved for a mortgage isn’t just a way to get a step ahead, in many cases it’s a necessity to buying a home. Many sellers don’t want to go through the negotiation process of selling their home only to have the buyer drop out when they can’t get approval for the mortgage they were relying on.

The Difference Between Pre-Qualification And Pre-Approval

Pre-qualification is a faster process than pre-approval and is usually a best estimate based on how the borrower answers certain questions about their financial history and status.

Pre-approval is way more valuable to a borrower than pre-qualification because it is a commitment from a lender for a decided amount after they have completed an in-depth verification process based on the submitted documentation.

Preparing For The Pre-Approval Process

The majority of lenders will require the same documentation in order to pre-approve anybody for a mortgage, but there is more information they will need in certain cases.

Anybody applying for a pre-approval will need to ready at least two years’ worth of financial information, including W-2s, Form 1099s and federal tax returns as well as current banking and financial records.

Here is where the pre-approval process gets more in-depth, not only will the lender need to see how much money the applicant has in their bank, but they will need proof as to where the money came from. The lender will need to know the difference between income, gifts or investment withdrawals to help them make their decision.

Having this information ready in advance will speed up the process significantly.

Prepare Proof Of Assets And Allow A Credit Check

Applicants will be required to prove ownership of all assets and will need a letter to prove that any cash gifts given to them to assist with the payment are not loans that need to be paid back. This is important information that will help a lender make a decision, so having the letter ready will save a lot of time.

The lender will also need to check the applicant’s credit to compare it to the applicant’s income. Many people refuse the credit check because they are afraid it will impact their credit score, but the impact is very low and the lender needs this information. It is also a good way to learn about any errors in the credit report early, before they can pose a problem down the line.

The process is not nearly as intimidating as it appears, and an experienced real estate agent can help you prepare everything you need well in advance of applying for pre-approval.