The real estate market has been very active With the interest rates low. Many people have found themselves in a position to purchase a new home.
Just because interest rates are low, obtaining a mortgage approval is still a complex process. For those that are applying for their first mortgage, you will want to be prepared before you start the process.
Here are some steps you can take to make sure you get the best mortgage possible. Following the right process can save you time and money which could help you build additional wealth through the equity of your home.
All lenders are going to pull a credit report and use this to judge if they will move forward in considering a loan for your home purchase. Not only does this influence the approval, it will also dictate the type of loan for which you will qualify.
We recommend you look at your credit report a few months in advance to see if there is anything you can clean up prior to submitting an application. You may find a few areas you can improve and increase your score by a few points.
A debt-to-income ratio is calculated based on the money you make versus the amount of debt you currently have. This is important to the mortgage lender because it determines how much money you have left each month to pay mortgage payments.
You may consider paying down your credit cards in order to improve this ratio. Paying off a few small debts will make a world of a difference.
The larger the payment, the less money you have to borrow from the bank. Borrowing less money equals lower payments. We suggest you save as much money as you can for a down payment. Those who put more money down from the start tend to get more favorable mortgage terms and interest rates.
If you can pay 20% or more as a down payment, you are likely to avoid PMI which is another monthly expense that can amount to more than $100.
This is something you want to decide on prior to applying for a loan. Do you want to be assured that your mortgage payments always stay the same, or do you want to gamble and see if a variable mortgage may adjust downward?
Most people believe a fixed rate mortgage is the way to go if the interest rates are already low.
If you are only going to own your new home for 3 or so years, you may want to get a variable mortgage that is fixed for 5 years and then adjusts later. You will get a lower rate in the beginning, but if you own it longer than you think, you could find yourself paying a higher rate than you can afford.
Mortgage professionals are not created equal. There are advantages and disadvantages among the different companies. You want a lender that will sit down and listen your needs. This is exciting, yet it is also a time where you are making a very large financial decision.
There are hundreds of Myrtle Beach Mortgage Lenders you can choose from. We recommend you ask your real estate agent to recommend one. We have a few that we recommend and we get feedback that they have done a fantastic job.
Make sure you feel comfortable with the lender you choose. Though many can do the job, buying a new home can be stressful and you want someone that you feel has your best interests in mind.
Mortgage professionals often complain that home buyers fail to submit a complete mortgage application. Not only is this frustrating, but it is nearly impossible to approve a loan without complete details. The application is easy to fill out and if there is something you do not understand, then ask the lender. That is what they get paid for.
Be prepared with pay stubs, bank statements, 2 years tax returns and a signed real estate purchase agreement.
In America, buying a new home is, on average, the largest financial transaction a person will make in their lifetime.
As a professional real estate agency, we are here to guide you through the process.
There are some great New Home Communities in Myrtle Beach available at this time. Let us know if we can do anything to help you find your new dream home.