22
Dec
By support
Home Mortgage Tips

3 Things That Will Absolutely Kill Your Chances for a Mortgage Approval

3 Things That Will Absolutely Kill Your Chances for a Mortgage ApprovalIf you’re about to seek approval for a mortgage, you’ll want to ensure you have a solid credit score and clean financial records to boost your likelihood of being approved. There are certain characteristics that lenders want to see in a mortgage applicant before they agree to give a loan, and you want to prove that you’re a responsible borrower. But certain behaviors can easily tank your application and crush your home ownership dreams.

Before you seek approval, make sure your finances are in order. Avoid these three mortgage-killing habits while your lender evaluates your loan and you’ll quickly find yourself holding the keys to your new home.

Using Up Most Of Your Available Credit

It can be tempting to start buying furniture when your mortgage is about to be approved, but you’re better off waiting on the shopping trip until after you get the green light from your lender. Using a significant amount of your available credit – or applying for new credit – will impact your debt-to-income ratio and change your credit score. You might even end up getting yourself a higher interest rate or reducing your credit score to below the qualifying range – so don’t go credit-crazy until after you’re approved.

Being Late On Your Monthly Bills

Payment history makes up one third of your credit score, so you’ll want to make sure you pay all of your bills on time and in full if you’re looking for a mortgage. A single 30-day late payment on a bill can easily knock 50 to 100 points off your credit score. Even worse, some lenders require a full year of on-time payments before they’ll even consider you for a mortgage.

Co-Signing Someone Else’s Loan

Co-signing on a loan is generally risky under any circumstances, but if you’re trying to get approved for a mortgage, taking on liability for someone else’s debt will change your debt-to-income ratio. Being on the hook for a debt you don’t own makes you look like a risk to lenders – if the primary borrower on the loan you co-signed stops making payments, you’ll need to pay the loan, and that could divert your cash away from your mortgage.

Getting approved for a mortgage is a critical part of the home buying process, but too many would-be homeowners torpedo their own chances of getting a mortgage by making poor decisions. Contact a mortgage professional near you to learn how you can give yourself the best possible chance of getting approved for a mortgage.

15
Dec
By support
Home Mortgage Tips

Refinancing This Winter? Follow These 5 Expert Tips to Get the Most from Your Mortgage

Refinancing This Winter? Follow These 5 Expert Tips to Get the Most from Your MortgageRefinancing a mortgage is a great way to take advantage of historically low interest rates or change your payment terms to be more affordable. And with interest rates at historical lows, there’s never been a better time to refinance your mortgage. If you’re planning to refinance your mortgage this winter, though, you’ll want to make sure you get the best possible deal.

How can you make sure that your mortgage works for you, and not the other way around? Here’s what you need to know.

Know What Your Break-Even Point Is

Your break-even point is the point at which the extra amount you paid out of pocket for the refinance and the amount you saved in a reduced interest rate is equal. In other words, it’s the point at which a refinance actually starts saving you money – and it’s important that you know when that point is. If you pay $5,000 in refinancing fees and your refinance reduces your monthly interest payment by $200, for instance, you’ll break even after two years and one month.

Opt For a Shorter Loan Term, If Possible

Refinancing gives you the ability to turn a long mortgage into a short one. And although a shorter mortgage comes with higher payments, more of your monthly payment is applied to your principal. With a 30-year mortgage, for instance, you’ll be paying mostly interest for the first 16 years – but with a 15-year mortgage, your payments will go mostly toward the loan principal after just five years.

Try To Avoid Prepayment Penalties

A prepayment penalty is an amount of money you pay in order to pay off your mortgage early. If you experience a sudden windfall and can pay off your home in one lump sum, or if you choose to sell your home, you might incur a prepayment penalty. Not all mortgages have these penalties – so talk with your mortgage professional and let them know you are looking for a morgage without a prepayment penalty.

Lock In Your Rate

Mortgage rates are at historical lows right now. One of the biggest reasons why people refinance their homes is to get lower interest rates – which is why, if you’re refinancing your home, you’ll want to choose a fixed rate mortgage. It’ll keep your interest payments low and manageable, so you don’t pay more than you have to.

Know Your Home’s Current Fair Market Value

Housing prices rise and fall over time, which can impact your loan rate when you refinance. Higher-value homes generally get better rates, so make sure you know your home’s fair market value.

Refinancing often means better mortgage terms, so make sure you take full advantage of this opportunity. Call your trusted mortgage professional to learn more.

10
Dec
By support
Home Mortgage Tips

Yes, It’s True: Mortgage Closing Costs Are Down. Here’s How You Can Take Advantage

Yes, It's True: Mortgage Closing Costs Are Down. Here's How You Can Take AdvantageMortgage closing costs have been coming down in recent years, which is good news for buyers. But if you’re buying a home in the near future, you’ll want to ensure you’re prepared to take full advantage of these lower fees – after all, keeping more money in your pocket is always good. When you close on your mortgage, take these three steps and you’ll find that you’ll pay far less in closing fees than most buyers would.

Ask The Seller To Pay Some Of The Closing Costs

In most situations, the buyer is responsible for paying all closing costs – that’s the industry standard agreement. But just because that’s what generally happens most of the time, that doesn’t mean you need to pay all the closing costs on your new home.

Negotiate with the sellers to see if they’d be willing to cover some of the closing costs. If you want to make a deal like this, though, you’ll want to add an extra incentive for the sellers to agree to it. Tell the sellers that they can choose any closing date they wish, or offer to accept the home “as-is” rather than requesting repairs.

Use The Money You Save For An Extra Annual Payment

With lower closing costs come savings that you can either pocket or spend. One great way to leverage lower closing costs is to use the amount of money you saved with reduced closing fees as an extra mortgage payment.

Most lenders will allow you to make one extra lump sum payment per year, without penalty – and by making this extra payment every year, you’ll save on interest payments. So use the money you saved in closing costs as part of an extra payment to reduce your debt load.

Reducing your closing costs and taking advantage of the lower fees is easy if you know what you’re doing. A mortgage advisor can help you to understand what closing fees are negoitable and how you can budget for success. Call your trusted mortgage professional today to learn more.