Hoping to grab a low mortgage rate? Then you better make sure you have done everything you can to make yourself an attractive borrower!
Mortgage Rates nationwide for 30-year fixed rate loans generally have hovered around 3.5 percent since August 2012. But as enticing as these rates are, only the best borrowers can qualify for them. If you are thinking about buying a home, consider the following to help become mortgage-ready.
BE REALISTIC. Gone are the days when banks would let you stretch unrealistically for a higher mortgage amount. Borrowers should look to spend less than 28% of their monthly gross income on a mortgage, including your property taxes, insurance and homeowners association fees. Take the steps to get pre-approved - just know that your bank or mortgage broker may have you qualified for much more than you should actually spend.
ADVICE. To be ready to purchase your new home have your down payment and closing costs saved and available.
DO YOUR HOMEWORK. Make sure there are no surprises on your credit report. Your bank or mortgage broker will want to know that you are not a credit risk - so remember that your credit is VERY important. I highly recommend a few months before you plan to buy a home to run your credit and make sure there are no surprises.
ADVICE. Most banks or credit agencies offer for a minimal fee monthly credit monitoring to stay on top of your credit.
TREAD CAREFULLY. Once you have been pre-approved and start house shopping the golden rule is do not make any drastic financial moves or changes! Keep up good spending and saving habits. You should focus on paying off debt not incurring more. DO not go out and buy a car or open credit card lines. This has caused one too many deals to fall apart I can assure you from experience.
ADVICE. Make sure to pay all your bills on time and avoid any major purchases.
If you are gearing up to get pre-approved and make the move to buy be " Borrower Fit" - Check your credit in advance for no surprises, have your tax returns and financials in order and ready to go for your mortgage Broker to get the ball rolling without any bumps in the road!