5 Mortgage Tips for Spring Real Estate Buyers
The spring real estate selling and buying season is ready to gear up. Many Twin Cities real estate professionals believe that there will be an uptick in home buying activity this year due to the improved economy and reduced unemployment rate. Here are some mortgage tips for people who plan on buying a home this year.
1. Study your credit. Though the economy has improved, good credit is still the key to attaining a mortgage. Get a hold of copies of your credit scores and history from the three credit-reporting bureaus. Study the reports to ensure there are no errors. Most lenders require a minimum credit score of 680.
2. Prepare your documents. Don't wait for your potential lender to request basic documents when you apply for a mortgage – get them ready now. The papers you will need are W-2s, income-tax returns, bank statements, and two of your most recent check stubs. Save these documents and any others in an electronic format.
3. Know how much you can afford. You could end up paying too much if ou rely on a lender to tell you how much mortgage you qualify for - they'll often try to get you to borrow the maximum amount. Plan for a budget range and stick to it. There are several calculators available that can help you determine how much house you can afford.
4. Shop around. Shopping around for a mortgage is more than simply comparing interest rates. Though interest rates are important, would-be borrowers should also consider points, closing costs and different types of loan products. Attain loan estimates from at least three banks and three mortgage brokers before deciding.
5. Be persistent. Not all lenders are the same. Just because one rejects your mortgage application, doesn't mean all of them will. Additionally, many they have their own internal underwriting guidelines, making some of them stricter than others. Ask why your mortgage was denied - you may be able to correct the issue.
Lender restrictions seem to get a little looser every day as the economy improves. Now is the time to make sure your ready for the moment it is time to talk to a lender. These tips will hopefully help you work towards a successful home purchase.