We do mortgages all day, every day. We make sure that everyone gets the lowest rate on their mortgage, and can move into their dream home for the lowest cost.
But how do we get this done?
What can you do to make sure that you can walk in and get that low rate before you call us? We put together a short list that really helps get your loan closed, and will save you money when you have them settled before you apply.
1.Shrink your debt
We check out your payment history when we determine if your credit is high enough for a loan. Pay your bills on time, pay over the minimum, and maintain a low debt-to-income ratio. Debt-to-income ratio is the amount that you make compared to how much you owe. That’s the basic definition. You can help this by improving your available credit as well – instead of using your credit cards, pay those balances down and show us that you have available credit, and that’s another sign of mortgage worthiness.
2.Read your credit report and get your FICO score
Fix any credit issues or errors quickly. Your credit report shows what types of credit you have, how long the accounts have been open and if you pay your bills on time. All three major credit-reporting bureaus–Equifax, Experian and TransUnion need to be examined, and check them for any errors. If you have any negative information on your record, write a letter of explanation for us that fully explains why legitimate negative items are on your credit report. There are legitimate reasons, including job loss, injury, or illness that can help justify a collection or a period of late or missed payments.
3.Show a stable employment history
We look for a minimum of two to three consistent years of work history with a continuous employer. Your salary should either rise or remain the same during that time. Having stable, consistent employment is a major marker toward your mortgage. That doesn’t mean that you can’t get a mortgage as a contractor, or someone that has fluctuating income. You just have to prove that you can afford the payments every month with your past paycheck stubs, and prove that you can weather any down times in employment.
4.Hold a 5 to 20 percent cash reserve that covers your down payment and closing costs
As long as you can document that money isn’t a loan, you can use gifts, inheritance, or any new money, including borrowing against your 401(k) towards your down payment. You just have to prove that it’s not a traditional loan that will impact your ability to repay your mortgage.
Mortgage rates are at historic lows, right now. This is the most opportune time for you to get a refinance or buy a new home. Take advantage of lower mortgage rates to refinance and save money. Call us in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515 and Nashville at (615) 810-8555. You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. Don’t forget to follow @TheHomeLoanEx on Twitter for breaking mortgage news and knowledge. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?