Why You Should Ask A Help From Mortgage Broker In Texas Pt 2

Top 5 Reasons To Use A Texas Mortgage Broker Right Now

Part 2

2. Ability To Locate The Most Advantageous Rates

Mortgage brokers generally have the ability to access upwards of 3o individual lenders when searching on a client’s behalf. These run the gamut of rates and terms, and brokers can carefully assess what is available and match loan programs to a borrower’s distinct situation. The end result may savings that run into the thousands or more over the length of the loan. Brokers are also privy to exclusive loan programs that buyers may not be able to access on their own.

3. Simplifying The Process

The mortgage industry has experienced a good bit of upheaval during the pandemic, and there is a lot of conflicting information circulating everywhere. This can lead prospective borrowers to feel overwhelmed and confused, something which may prompt them to scuttle their loan plans entirely.

Mortgage brokers have the knowledge and up-to-date insights needed to streamline the process and provide the latest details on available loan programs. This is a godsend for borrowers who might otherwise be discouraged from continuing their search for the right mortgage product.

4. Customized Loan Recommendations

Brokers have a legal obligation to work in the interest of their clients instead of that of the lenders with which they engage. The best brokers are those who work collaboratively with borrowers to learn about their situation, their needs, and their goals to come up with the very best solution.

A seasoned mortgage broker will offer a range of options and information all meant to aid in the making of truly informed decisions. These skilled professionals can also work with borrowers who are in need of refinancing options or even loan repayment forbearances.

5. Streamlining The Application

There is no doubt that purchasing a home is a thrilling prospect, but it does not come without significant stress. Juggling all of the documentation requirements, inspection details, interest rate considerations, and more can make even the calmest person start to worry, and that does not even address the strain that packing, buying furniture, and establishing utility service entails.

However, a top-notch mortgage broker can help shoulder the burden in a way that makes a massive difference. These professionals undertake all of the research duties related to your home loan, determine how much you are qualified to borrow, and manage the application process all the way through to completion. This is a significant thing for those who are already taxed by the logistical planning that moving inevitably involves.

By taking the time to find a reputable mortgage broker that you can trust, you can save yourself many of the headaches you would surely face by trying to go it alone. Align with a seasoned, skilled mortgage broker to aid in your home loan search, and lighten your load today.

Feel free to contact or call us to speak with our mortgage professional for any help you need with your home loan application. We hope to work with you soon! Click here to go to the first article in this series.

Why You Should Ask A Help From Mortgage Broker In Texas Pt 1

Top 5 Reasons To Use A Texas Mortgage Broker Right Now

Part 1

Those seeking to purchase or refinance a home understand that there are seemingly countless lenders available on the market from which to choose. Selecting the best from a very crowded field can make all the difference in terms of the interest rate and loan specifics that will ultimately apply. This is especially true amid the pandemic when information and policies seem to be changing all the time.

Mortgage brokers are highly-skilled professionals who can assist borrowers in navigating the market’s intricacies, with the overall goal of steering them toward the home loan that truly meets their needs and provides real financial value. Continue reading to learn more about the duties of a mortgage broker and why they are an indispensable part of the home buying or refinancing process.

What Mortgage Brokers Do

Mortgage brokers effectively serve as a middleman, standing between borrowers and lenders throughout their home buying or refinancing journey. If you are looking to borrow, a broker will represent you in the search for lenders willing to provide you with the most competitive interest rate and loan terms. They also serve as facilitators for the entire mortgage process, from initial application to closing.

Key Mortgage Broker Tasks

Because a mortgage broker understands the ins and outs of the loan process, they can provide the guidance borrowers need at every step along the way. Skilled brokers take the time to understand your objectives and your specific financial circumstances. They will explain the various loan programs for which you may be eligible and outline the cost involved with them. Brokers also handle the application process and see you through every phase until your deal actually closes.

Cost Of Mortgage Broker Services

The services of a mortgage broker are ultimately covered by lenders, rather than the home loan borrower. Brokers will receive commissions for suggesting a particular loan product when it is selected and received by an applicant. As such, borrowers don’t usually pay anything for the broker’s services.

It should be noted, though, that there are certain situations in which a broker fee will be charged to the purchaser. This amount may be in place of, or even in addition to, commissions paid by the lender.

Key Reasons To Employ Mortgage Brokers

1. Familiarity With Changing Lender Requirements

The coronavirus pandemic has caused numerous home lenders to change policies with alarming frequency. A number of lenders have altered eligibility requirements, documentation rules, and more. Submitting an application directly to a lender while unaware of recent changes can cause the approval process to be delayed or scuttled altogether. Brokers, however, remain fully apprised of any and all such changes, making it easy for them to adjust your applications on the fly, something that can increase your chances of success.

Feel free to contact or call us to speak with our mortgage professional for any help you need with your home loan application. We hope to work with you soon! Click here to go to the next article in this series.

 

Important Things To Understand When Applying For A Texas Home Loan Pt 2

Top 6 Things To Know Before Taking A Home Loan In Texas

Part 2

3. The Small Details In The Loan Contract Matter

An agreement for a home loan is a legal contract like any other and the legal terminologies can easily cause perplexity to the borrower especially the small “hidden” details in the agreement.

For instance, one may think a loan “default” implies a situation when the borrower is incapable of servicing by payment of EMI. To some banks, the interpretation for default may mean when a borrower dies, goes through a divorce (and the spouse was a co-applicant in the home loan), or when the borrower is sued for a civil or criminal case may be tax fraud.

It is also common to find clauses requiring the borrower to attach extra property for loan security in the event the price of the original property falls. In this case, the bank may adjudge the act of omission to provide extra collateral as a default.

4. Negotiate For A Favorable Rate

You must try to negotiate for a more favorable interest rate on the loan regardless of the loan type you have applied for as the borrower. In most cases, the bank holds the upper hand in the negotiations but a borrower can always bargain for lower rates especially if they have a long-standing relationship with the lender or a strong credit rating.

It is key that you have a clean record of timely loan repayment to support your credit history and request for favorable loan rates. Most banks are appreciative of a strong credit rating/history because a strong credit rating supports their quest for a good lending business.

Additionally, it might prove helpful if you can try to secure the loan at the end of a month when banks are racing to hit monthly targets for growth and expansion of loan portfolios.

5. Long Loan Repayment Durations Mean Expensive Loans

The Reserve Bank of India has been aggressive in enforcing the monetary policy for a considerable time now. An increase in the base lending rate has pushed banks to increase the interest rates charged to their customers on home loans and which implies a higher EMI for the borrower.

Many borrowers are unable to meet the EMI and appeal to the lender for an extension on the loan repayment duration in an attempt to lower the EMI. This is a move that creates temporary relief for the borrower who is in the desperate situation. However, in the long run, the borrower ends up paying more money.

As an illustration, consider a situation where the borrower has taken a loan of Rs 30 lakh to be repaid after 20 years at a rate of 10.5% per annum. In this case, the EMI to be paid is calculated at Rs 29,951 while the total interest to be paid on the loan will end up at Rs 41,88,240.

For a home loan with a long repayment tenure, the borrower ends up paying an interest amount that is higher than the principal amount borrowed.

6. Explore Alternative Lenders

Just because you have secured a loan with a given lender does not mean you are stuck with the lender for the duration of the loan tenure.

If you can source a lender with better financing terms than the original lender, you can always change lenders through available refinancing methods. Currently, most banks have removed pre-payment penalties on floating rate loans and only seek a processing fee from the borrower to effect the change.

As a borrower, always try negotiating for lower rates by seeking a reduction or a full waiver based on a study of comparable home loan products in the market.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the first article in this series.

Important Things To Understand When Applying For A Texas Home Loan Pt 1

Top 6 Things To Know Before Taking A Home Loan In Texas

Part 1

The process of taking on a loan is a bit more complex than many people think. From advertisements, it seems like many banks are always ready to give out as many loans as possible which contradicts the dreary process one must go through to have a loan approved.

Loans, like other financial investments, require the holder to be well conversant with how a loan product works to avoid getting into financial ruins later.

The following are the important factors to be aware of before getting into a loan contract with your financial institution.

1. Determinants Of Loan Eligibility

One of the most informal ways of qualifying a borrower for a loan is to compute their Equated Monthly Installment (EMI). Often, banks will require you to part with 40 to 50% of your monthly salary which will be directed to pay the loan. Noteworthy, reimbursements and allowances are not considered part of your salary used to net the EMI.

Additionally, your EMI will be negatively affected if the loan holder is servicing another debt elsewhere using their salary stream. In other situations, banks are keen on the number of dependents under the borrower. If more money from the applicant’s salary must be diverted to other important needs, the implication is a lower loan repayment capability.

Aside from the level of income after expenses, the reliability of borrower’s income stream is also questioned. Those borrowers with a more stable income are likely to find the eligibility criteria easier compared to borrowers in self-employment with unsteady income flow.

How old are you will influence the duration of the loan repayment period. Under normal scenarios, loan repayment tenures will not exceed the retirement age unless the borrower has a younger loan co-applicant.

Also, the co-applicant cannot be minor and should have achieved a given number of years for the application process to be successful, – a law that was set up to minimize ownership disputes. A co-applicant can enable the one to get a higher loan amount if the income level of the co-applicant is considered in the eligibility test.

The value of the property also affects the success of a loan application process. Most banks will not lend more than 70-80% of the value of the property to the borrower.

2. The Type Of Loan The Borrower Seeks

The type of interest rating categorizes home loans between loans with a fixed interest rate throughout the loan repayment duration or loans with a floating interest rate that varies from time to time depending on the market conditions.

Just as the name may suggest, for a fixed interest rate loan the interest charged on the loan does not change with fluctuations in the money markets. However, the interest rate on this loan is usually 1-2.5% points above the contract interest rate on a floating interest rate loan.

The clause to add extra percentage points on interest rating for a fixed-rate loan will vary from bank to bank.
The important thing to remember is that the EMI will be affected by the amount of interest charged on the loan. A higher interest rate will increase the number of periodic loan instalments required to be paid to retire the loan.

At face value, fixed-rate interest rate loans may seem a more viable financing option until you speak to a loan expert. When interest rates in the money market fall, the borrower is stuck paying a loan above the interest rates; the borrower’s existing home loan proves quite expensive in the long run when interest rates fall.

In such a fixed-rate loan case where interest rates fall, a borrower is legally required to pay an equal amount of interest charges all the time regardless of the level at which the interest rates in the money markets are prevailing at.

Additionally, it is common for banks to insist on adding an interest rates review clause in the loan contract where the bank exploits avenues to raise the interest rate on the home loan after a fixed period or a drastic rise in interest rates.

On the other hand, floating rates are more preferred unless the borrower (with the help of a loan’s expert) can rationally foresee a big increase in interest rates in the market over the loan tenure.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the second article in this series.

Purchasing A Home In Texas: What Credit Score Do You Need?

The Ideal Credit Score That Allows You To Buy A Texas House

Part II

What’s The Minimum Score Unlikely To Affect My Mortgage Eligibility?

Corpus Christi texas classic home bought with assistance paymentsIf you are not a veteran who automatically qualifies for a home loan from Veteran Affairs, a credit score of at least 500 is a must. The same minimum is required in order for you to qualify for a 10% down-payment for a loan through the Federal Housing Administration.

If you don’t meet those requirements, it’s not the end of you. You can get a parent, spouse, or friend with better credit to cosign for your loan. This could help better your chances of approval for a traditional mortgage. If that’s not the case, follow suit and work to improve your credit score before proceeding to apply for a mortgage.

What Credit Score Do Lenders Check?

Almost 90% of lenders use your FICO Score. For your information, this is the credit score that’s most widely used. Though, depending on the type of loan, different versions of the FICO Score are used.

The following scores are likely to be in your lender’s checklist when you are applying for a mortgage loan:

  • FICO Score 2 based on Experian data
  • FICO Score 5 based on Equifax data
  • FICO Score 4 based on TransUnion data

What’s the Interest Rate You Are Likely To Get With Your Credit Score?

For simplicity, credit scores are broken down into categories. This helps you get to know the quality of your creditworthiness and steps you’ll move to boost it.

  • Poor – 300 to 579. With a poor credit score, it’s unlikely for you to get mortgage approval. But things may work out for you if you have a cosigner or an underwriter willing to accept you. With these terms, if you’re lucky to find a lender, be ready to cover high-interest rates on your loan.
  • Fair – 580 to 669. Though you’ll qualify for a loan with a fair score, your interest rates will probably remain high, a bit higher than with a good or very good score.
  • Good – 670 to 739. This is an awesome score that’s unlikely to affect your interest rate that much. Your rates are likely to range within 0.25% to 0.5% with such a score.
  • Very good – 740 and higher. Get the lowest interest rates and the best payment terms in the market with this score.

Is It Necessary To Check For Credit Report & Score Before Searching For Houses?

Sure thing. Having a rough idea of your credit score is vital for your home buying process.

With knowledge on your credit report and score you’ll be able to:

  • Make corrections of inaccurate information in your report before applying.
  • Make a prediction of whether you’ll get approved or not, and approximate your interest rate.
  • Find out the areas to improve your creditworthiness before buying.

How Can You Improve Your Score Before Applying For A Mortgage?

There are tactics that are likely to work for you in order to improve your credit and enjoy low-interest rates and the best terms when you apply for a mortgage. Let’s review them:

  • Accumulate savings for a large down payment
  • Keep a close eye on your credit report.
  • Ensure to pay your bills at the right time
  • Look for the services of credit repair experts
  • Hold off on other credit.
  • Reduce your credit utilization ratio.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the first article in this series.

Purchasing A Home In Texas: What Credit Score Do You Need?

The Ideal Credit Score That Allows You To Buy A Texas House

Part I

If you’re not well conversant with the real estate industry and beginning to think of purchasing a home, it’s good you know that your credit score can affect your ability to get a mortgage. Though it doesn’t mean the world, a good credit score is vital. It boosts interest rates and improves loan terms. However, it doesn’t mean that you need perfect credit in order to own a home. There’s much still hope.

Knowing everything, in terms of the impact your score has on your mortgage rate, you’ll be able to grow your credit in advance before you proceed to own a home.

How Does Your Credit Score Affect Your Mortgage Rate?

Fort Worth texas brick home bought with assistance paymentsLet’s face it! Before a lender settles on a decision of approving you for a mortgage, he/she must consider your credit score. Moreover, they put into consideration your accumulated savings, debt-to-income ratio, and the amount of money you readily have available to give as a down payment.

Your scores go beyond determining whether you’re eligible for a mortgage. The interest rates and payment terms you get are largely influenced by your score. A credit score ranging anywhere from 650 to 699 – which is below average – means lenders may bring in risk-based pricing while stating details regarding your mortgage.

In order to cancel out the perceived risk of having to deal with a borrower whose credit score is low, a lender may take the step of increasing the mortgage rate. What does this mean? It means a credit score of 650 is likely to get a higher interest rate than a credit score of 720. This could cost you a fortune more throughout the life of your mortgage.

What’s The Required Credit Score To Buy A House?

It’s estimated that with a score of 660 you’ll probably qualify for a home loan. Though it’s not certain. On the other hand, scores of 660 and below, means you have to deal with a high-interest rate and poor loan terms.

With a minimum credit score of 580, you qualify for an FHA loan. 3.5% of your purchase amount goes to the down payment. However, you’ll be good to go in case of an underwriter intervention. The underwriter assumes the financial risk, and may only require you to carry minimal debt and prove to have a significant amount of savings.

At the moment, the average American’s credit score is 695. That’s relatively high. In case you desire top-level rates, focus on reaching a credit score of about 740 before even thinking of how you can apply for a mortgage.

  • With a credit score of 620 or higher, you’ll comfortably work with conventional mortgages.
  • A credit score of 640 or higher is needed for USDA loans.
  • No minimum credit score is necessary for Veteran Affairs loans.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the second article in this series.

Knowing How To Choose A Capable Texas Mortgage Lender

Tips To Find A Competent Mortgage Lender Suitable For Your Need In Texas

Part 2

2. Seek Recommendations From People You Know

Start by asking your family members, friends, and agent for recommendations.

A good mortgage lender entails more than the terms they offer, and no one knows better how a particular lender operates than their previous clients. Ask your family and friends to provide recommendations (both for and against) mortgage lenders. By seeking recommendations, not only will you have some mortgage lenders to consider, but you will also get an insight into what to expect from a particular lender in terms of refinancing options, communication, and more.

In case you’ve identified a reliable real estate agent, then they could have some good recommendations. They work with different clients on a daily basis who are, in turn, working with different mortgage lenders. Hence, they are able to deduce which mortgage lenders the clients most satisfied with.

Decide whether a mortgage lender is suitable for you.

If you want help sorting through all the available options, then a mortgage lender is an expert who can help you choose the best mortgage lender for you. Obviously, the trade-off is that there is a fee you have to pay. While most mortgage brokers have access to mortgage products that provide adequate savings to offset this cost, you aren’t guaranteed that it will work out this way. Considering the amount of time that you have to commit to researching mortgage lenders and comparing them, letting a mortgage broker do all this for you might be the best option.

3. Communicate With Lenders For Pre-approval

Seek pre-approval and compare the numbers.

Though getting mortgage pre-approvals might sound like doing something official, it is, in fact, part of the comparison shopping process – Just to be clear, pre-approval isn’t the same as pre-qualification, which you may have already done. Pre-qualification provides a ballpark figure of the price of a home you can afford. Narrow down to your top three options and apply for pre-approval to all of them. Meticulous comparison shopping is crucial as even the slightest difference in interest rate percentage point can save you thousands of dollars over the long-term period of your loan.

With that in mind, applying with three lenders normally enables you to find out how much you can afford under the numerous terms that you will qualify for.

The pre-approval letters you get serve two functions. The first and most important one is that you’ll begin your house hunting with confidence and you will be able to present an offer on a particular house you like with the support of a mortgage lender. Secondly, you get to check out all the terms a lender is ready to offer you. With these terms, you will be able to choose the best offer.

Understand APR versus interest rate.

When comparing mortgage terms, there are two terms that people often confuse and they are annual percentage rate (APR) and the interest rate. It is easy to assume that comparing the interest rates between different loans is a fair comparison, however, it isn’t. A low-interest rate mortgage can have hidden fees that make it more expensive in the long-term than a high-interest rate mortgage. The APR manages all that. Compare different APRs and you will be able to make a more accurate comparison.

Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the first article in this series.

Knowing How To Choose A Capable Texas Mortgage Lender

Tips To Find A Competent Mortgage Lender Suitable For Your Need In Texas

Part 1

Finding the right mortgage lenders has and will always be crucial for home buyers. Chances are that your mortgage lender will be enabling you to make the most significant investment of your life. In addition, your mortgage lender will be a part of your life for many years to come or even decades.

The following is a brief guide on how to find the best mortgage lender for you:

1. Find Out The Available Mortgage Options

Decide whether you want a hands-on lender or an online lender.

houston home bought with an FHA mortgage loan moderate incomeWhen you are finally ready to apply for a mortgage, you will have plenty of options. Credit unions, national banks, local banks, and mortgage lending institutions are some of the common options. Depending on your needs, any of them could double as your best mortgage lender. In case you are looking for a very hands-on experience, where you will be able to just walk into an individual’s office and ask questions, then a credit union or a local bank might be your best option. If you aren’t a big fan of the hands-on experience and just want the online experience, then there are online mortgage lenders who got you covered. It is smart to research a number of vendors in each category in order to find out which one provides the terms and services that are favorable to your needs.

Research mortgage types.

There are various kinds of mortgages, and you want to ensure that you choose a mortgage lender that offers the type of mortgage that best suits your needs. The following are some of the different kinds of mortgages:

  • Adjustable-rate Mortgages: After an early period of a low-interest rate – normally 3, 5, 7, or 10 years, the rate will adjust with the market. This makes payments unpredictable for the remaining period of the loan. However, this type of mortgage could be the most ideal option if you are planning on selling before the completion of the initial period.
  • Fixed-rate Mortgages: For this type of loan, the interest rate remains the same even for the entire period of the loan. This means that you will be able to predict your mortgage payments.
  • Conventional Loan: As the name suggests, this is a traditional loan. It can either be an adjustable rate or fixed -rate. The terms of this loan are based on your credit score, financial history, and down payment.
  • Government-backed Loans: VA, USDA, and FHA are some of the programs that are supported by the government. Generally, they are fixed-rate and need lower credit scores and lower down payments. However, each has specific requirements such as purchasing in a rural area, being a veteran, or passing income requirements.
  • Jumbo: This is a type of loan that surpasses the amount stipulated by the Federal Housing Finance Agency. These loans are normally used to purchased luxury homes or homes in markets that are highly competitive. Their requirements are different from those of smaller loans, for instance, they have a large down payment and require very high credit scores.

Check out customer reviews and company information.

Check out online customer reviews and carefully look through the company’s website to find out more about it. Narrow down to the mortgage lenders that offer the kinds of mortgages that you are looking for, provide the kind of customer service that you are yearning for, and have overall positive reviews.

Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the next article in this series.

Complete Guide When You’re Preparing For A Mortgage In Texas

Get Ready For A Texas Home Loan With These 10 Useful Tips

Part 2

6. Financing The Home Purchase

You will need to do some homework on the types of financing available to you, 30 or 15 years, fixed or adjustable mortgage, when looking to purchase a new home before choosing one that best suits your situation. A mortgage with a fixed rate is your best option if you want a guarantee and security that payments will remain the same over the life of the mortgage. A mortgage with an adjustable-rate, on the other hand, is a better fit for those who think that rates will fluctuate over the course of the mortgage and desire some wiggle room.

7. Your Options Increase As Your Down Payment Grows

While still being realistic as highlighted above, it is important to point out that the terms of the deal you get improve as you increase your down payment. As the years go by, in the world of mortgages, zero down payment offers are disappearing. You can be assured of making lower monthly payments if you start by making a higher deposit.

8. Penalties For Pre-payment

Some lenders may penalize borrowers for paying off their mortgage early; be sure to find out this first before taking up a mortgage. When borrowers receive a huge amount of money, it is common for them to increase their mortgage payments to ensure that the mortgage is paid up earlier. However, you should first find out whether paying your mortgage earlier will actually come with a penalty.

9. Make Mortgage Applications In A Strategic Way

Your credit rating is temporarily lowered by the hard inquiry made by lenders whenever you make a loan or mortgage application. You might end up lowering your credit score significantly by making numerous applications to a variety of lenders over an extended period. However, making a number of applications over a two week period is only treated as one inquiry; and thus won’t do much harm to your credit score.

10. You Might Have To Wait Longer To Own Your Own Home

While the prevailing rates may appear to be a once in a lifetime occurrence, it just might not be possible for everyone to get a mortgage at this time. However, you should not abandon your dreams just because you fall into this group. You should remember that the mortgage crisis came about as a result of borrowers biting off more than they can chew, and as the economy is still fluctuating, things could still change in your favor. The importance of proper timing cannot be further emphasized when it comes to huge investments such as buying a home.

Meet Mortgage Lending Texas

Committed to offering all clients the best level of service when it comes to all their mortgage requirements, the team at Mortgage Lending Texas is made up of mortgage professionals distributed all over the state of Texas. From Houston, Dallas, Tomball, Spring, and Austin to The Woodlands, San Antonio, and Dallas, Texas we also offer numerous loan programs and the lowest rates. To ensure that you get a mortgage that is perfectly suited to your situation, meeting your specific expectations, our seasoned mortgage professionals will work closely with you. Our team of experts has what it takes to help you find the right loan at the best possible rate, whether you are refinancing an existing loan, or buying your first or dream home.

To ensure that we continue serving our customers for the foreseeable future, we aim to cultivate a long-lasting relationship with each one. We maintain the privacy of your information; a promise that the larger service providers cannot keep. Across the lending arena, our brand is widely trusted.

You can use any of the interactive features on our website or call us anytime to speak to a seasoned mortgage expert directly. We hope to work with you soon! Click here to go to the first article in this series.

Complete Guide When You’re Preparing For A Mortgage In Texas

Get Ready For A Texas Home Loan With These 10 Useful Tips

Part 1

Are you looking to purchase a property after checking your credit? Be one step ahead of the game by reading through the following tips before you go in to see your mortgage broker.

1. Check Your Credit

You should start by checking your credit report as that is also the first thing that most lenders usually do after being approached by borrowers. That point where you are actively trying to demonstrate that you are creditworthy to lenders, so as to increase the likelihood of getting the best deal, is also the best time for you to regularly track your credit. You not only want to ensure that no one is harming your credit score by illegally accessing you’re your credit but also want to ensure that your score is where you want it to and your credit report has no mistakes in it.

2. Prepare Accordingly

You will have a clearer idea of your credit status after consistently monitoring your credit report. Be sure to get any errors or concerns cleared up as soon as possible by consulting the three credit reference bureaus. Keeping tabs on your score over an extended period of time will also demonstrate how your score might be affected if your debt to credit ratio is very high. Immediately investigate common signs of identity theft such as any addresses or accounts included in your credit report that are not yours or you did not open.

3. Do Some Research

While the word research strikes fear into most people’s minds, we included, this time you won’t be reading up on the periodic table or mathematical theorems, as the stakes are much higher now. You have to do everything you can to get the best possible deal as you will not just be acquiring a new home you will also be making a lifelong investment. Before you agree to anything or sign any documents, comprehensively research brokers, rates, and loans. You are bound to be rewarded with a better deal if you get the tedious work done at this early stage.

4. Keep Your Expectations Realistic

You need to keep your feet on the ground regardless of how much you might want to get a new house. All your calculations should be based on the rate you can actually afford and not the rate you are hoping to get; for instance, if you can only be able to afford a five percent deposit avoid pegging your hopes on a lower rate that requires a higher deposit, such as twenty percent.

5. Step Into The Shoes Of Lenders

A borrower’s credit rating is representative of how confident lenders are of being repaid after providing them with borrowed funds; a lender’s decisions regarding the loan amount and rate to be charged are based on the credit rating. Simply put, you are more likely to get the rate and loan amount you want with a higher credit rating.

You can use any of the interactive features on our website or call us anytime to speak to a seasoned mortgage expert directly. We hope to work with you soon! Click here to go to the next article in this series.