Month: September 2021

Your number one priority before you begin your new home search is to meet with a mortgage professional to determine what you are qualified to buy. In a competitive seller’s market and with rising interest rates, you want to be preapproved and know what price point you should target in your search.

Even if you feel that your credit score is high enough to get the loan of your choice, be prepared to provide documentation that attests to your creditworthiness. You will need to show us, your mortgage consultant, everything that verifies your income and assets. If you constantly stay on top of your personal documents, then lining up your financing at any given time should be much easier.

We will look at your debts and may recommend that you pay off or pay down some debts even though you have been timely in your payments. Lower debt will improve your debt ratios. Since this may take some months to accomplish, it is important to start the loan process as soon as you can.

By enduring this preapproval process, you can narrow your home search to homes that you can comfortably afford. A successful preapproval gives you a written letter that you can give to your real estate agent showing that you are a qualified buyer and in what price range. Many agents don’t want to spend time taking prospects around to homes unless they produce preapproval letters.

This information should help you make the decision as to whether or not you are ready to start house hunting. A call or email is all we need to get things in motion for you and get your financing in order so you can be a strong buyer. We’re always here to help.

The 30-year mortgage has roots as far back as the 1920s. During this era, a home purchase was financed as a five-year loan with a 50% down payment and a balloon payment at the end of the five years. Since most borrowers wanted to remain in their homes, they had to keep refinancing the loan balance into another five-year loan until it could ultimately be paid off.

These loan terms made it difficult for most people to buy homes because it was hard to come up with 50% down. Fortunately, the advent of the Great Depression in the 1930s motivated the creation of 30-year mortgages because it was felt that buyers could better afford the payments that 30-year mortgages created and that younger buyers could pay off the mortgages before they retired. The 30-year mortgage increased homeownership because more people could qualify to buy homes.

As time has evolved, so have mortgage offerings. Even though people move more often today, the 30-year mortgage is still the loan of choice because the payments are more affordable. For those seeking to pay off their mortgages in a shorter period of time, there are 15- and 20-year options. While the interest rates are lower over the life of these loans, the payments will be higher.

As your mortgage professionals, we can review your financial status and present to you your mortgage choices to determine which loan best fits your needs. Call or email us today.