Financing
In this current real estate environment, it’s important to work with local mortgage brokers who understand the local real estate market. Home prices are effected by its condition and neighborhoods.
Mortgage brokers will help you understand what it takes to qualify for a loan, estimate closing costs, and look at your monthly payments. They are part of your real estate team.
For mortgage broker referrals, please contact me. I work very closely with my mortgage brokers to ensure a smooth transaction.
In the meantime, here is some useful finance-related information.
Credit is key
In the past, if you had less than perfect credit, you could probably still obtain the financing you were looking for. Now, however, lenders might not even look at you if your credit score is lower than 700. Plus, it has to have been that high for a while, so this should be your first step when getting things in order so you can get your mortgage.
- Never use more than 30% of your available credit or lenders might think that you’re becoming overextended.
- Don’t close old accounts; keep them open, but don’t use them. When you close the accounts, your credit score can suffer.
- The lower the amount of money you owe on your financial obligations, the better, so bring down the balances on your debts as early as possible so potential lenders don’t balk at how much money you owe to creditors already.
What sort of down payment do you have?
Believe it or not, the size of your down payment can make a big difference in how easy it is for you to obtain your mortgage, so it’s important to keep this in mind. Many experts feel that the age of “no down payment” is past and now it’s time to begin saving and planning well in advance.
Remember that many lenders really got burned when they offered low or no down payments because the housing market in many areas tanked, leaving homeowners with little or no equity to fall back on. This has caused more and more lenders to accept short sales in an effort to get some of their money out of properties. For you as a prospective property buyer right now, this means that you’ll have to guarantee that you can afford to put about 20% down in most cases.
The type of loan will make a difference
It’s also important to remember that the type of financing you get will really make a difference. If you’re purchasing for a quick turnover and are confident this will happen, you may still be able to qualify for a balloon or ARM mortgage, however, if this isn’t the case, your most likely chances of getting a mortgage will be if you apply for a fixed rate loan stretching over the course of 15-30 years in most cases.
How to get started
If you are confident that you can obtain your residential financing, then there is no better time than right now to get started. The first thing you should do is contact a mortgage broker, who can help you to get the financing you need and walk you through the qualification and applicatin process step by step. Your broker will also be able to explain everything in terms which you can understand and help you to explore your best financing options.
The next thing you need to do is consider what type of residential properties you’re interested in. Are you looking for a home for yourself or is this more for rental properties? Remember, if you have more than four units, you’ll need to get a commercial loan.
Then it’s time to choose a property. This is the fun part for many, however it’s important that you make sure to have your financing in place and pre-approved before you begin hunting, because nothing puts a damper on property shopping like finding out your financing fell through.
