Jan 16, 2013
Getting a home mortgage can be a pretty overwhelming experience for some home buyers. After all, there is so much that goes in to getting a loan – from deciding how much you can feasibly afford to proving your income to your lender.
But the pay-off is huge when you finally move in to the Wake County area home of your dreams!
Today, I’m going to provide you with some tips on how you can be sure to secure a mortgage loan in the New Year.
Wake County Home Buying
Here are some ways you can prepare for securing a loan on the Wake County real estate market:
Check your credit. The better your credit score is, the more likely you’re to secure the loan you want. Get copies of your credit scores as well as credit history from the three main credit-reporting bureaus to get a well-rounded idea of what your credit score is. Most lenders are looking for a minimum credit score of 680 but Federal Housing Administration loans may allow for lower scores than that.
Prepare Necessary Documentation Before Your Approach a Lender. No matter where you ultimately get a loan, the lender is more than likely going to want to see certain documentation from you every single time. These items include: two pay stubs, W-2s, income tax returns and bank statements. Get organized in the beginning and you’ll save yourself a lot of headache later.
Understand your financial limits. You want to avoid borrowing the maximum amount you can afford because it may end up putting undo stress on you. So plan your budget and make sure to leave room for any unexpected expenses. Then you’ll go into the mortgage process with a much more realistic outlook.
Look Around for the Best Mortgage. Every bank is going to have their own unique deals to offer interested home buyers like you. So shop around to see who has the best interest rates, loan types and more.
Think about getting a short term loan. Perhaps in the past, a shorter-term loan may have not been feasible because of sky-high interest rates. But nowadays, it may be more reasonable for you to get a shorter-term loan (and save a lot of interest fees) instead of a typical 30-year loan.
Maintain your credit score after your mortgage is approved. A mortgage is not a sure thing until you attend the closing of your new Wake County home. So make sure to maintain your credit score throughout the entire process because more than likely, the bank will check your score one more time before closing. That means you need to pay your bills on time, not open any new lines of credit and not close any accounts.
Be prepared to explain any financial gifts. For many first-time home buyers, relatives will give them a couple of thousand dollars to help them with the down payment. That’s fine as long as you are able to document and explain where that money came from. Generally speaking, FHA loans will allow borrowers to receive financial help from relatives. In the case of conventional loans, borrowers may have to put down at least 5 percent down payment from their own funds.
Don’t give up. If the first lender you approach rejects your mortgage application, keep trying. All banks have their own underwriting guidelines and some banks are stricter than others. Take something away from the rejection by asking why your application was denied. This will help you when you apply for a loan at the next bank.
Seek help from an expert. You don’t have to go through the mortgage application process alone. By working with an experienced Wake County REALTOR, you’ll receive expert help that will make the process much less stressful.
Purchase a Wake County, NC Home Today!
If you would like to learn more about investing in Wake County real estate, please contact me, Rachel Kendall and my team of real estate experts.
While you’re at it, please take a few moments to browse some of our online home-buying resources, such as:
Until next time,