Plano Homes : How to get a home loan
As many of you are aware interest rates on home mortgages are at all-time lows, giving buyers the ability to borrow money for a lower cost than we have seen in over 30 years. This is giving buyers in today’s market more power than ever when it comes to buying a home. Typically our buyers are able to get more of a home and of better quality than they would have just 2 years ago when rates were in the 7 and 8’s (They are currently under 4% on both a 30 and 15 year fixed note). So you may be wondering just how one goes about getting a home loan. Well, today is your lucky day because you have come to the right place to get that answer.
While the process for getting a mortgage approved is trickier today than a few years ago, qualified home buyers can still take advantage of today’s record low mortgage rates by keeping in mind the following simple steps:
- • Document your income: Today you need to verify your income to your lender. That means W2s for salaried employees and tax returns for the self-employed. Gone are “stated” or “no income” loans where income was not verified, so be sure to secure the necessary tax paperwork in advance.
- • Check your credit score: Today’s lenders are demanding that home buyers have close to impeccable credit, so be sure to monitor your credit score closely. As far as credit scores, average score for Americans is well over 700, according to FICO or Fair Isaac Corporation, the most widely used credit score model in the United States, the median score is 723. While credit score requirements vary by lender, many borrowers will qualify those with scores below 700. If you are just out of bankruptcy or a foreclosure action, you probably won’t get financing, as you might have in the past.
- • Calculate your down payment: While, “no money down” loans are few and far between, a Federal Housing Administration (FHA) loan can be obtained with just 3.5% down, and some conventional loans at 5% down.
Ultimately, a stable and verifiable income, a positive track record of paying debts, and a reasonable down payment, obtaining home financing is achievable in today’s rocky economy.
Before you apply, talk to a licensed mortgage broker about getting pre-approved for a mortgage or fill out a pre-approval application from Trident Mortgage to see if you qualify
The information Below comes directly from the US Department of Housing and Urban Development
1. Figure out how much you can afford
What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate.
|How much home can you afford?|
|Buying vs. Renting|
|Homebuying programs in your state|
|Fair Housing: Equal Opportunity for All– brochure|
|Real Estate Settlement Procedures Act (RESPA)|
3. Shop for a loan
|Looking for the best mortgage: shop, compare, negotiate– brochure|
|Let FHA help you|
|Learn about interest only loans|
|Avoid Predatory Lenders|
|Homebuying programs in your state|
|Let FHA help you (FHA loan programs offer lower downpayments and are a good option for first-time homebuyers!)|
|HUD’s special homebuying programs
5. Shop for a home
|Choose a real estate agent|
|Wish list– what features do you want?|
|Home-shopping checklist? take this list with you when comparing homes|
|Homes for sale(including HUD homes)|
|“Fixer-Uppers – home purchase and repair programs|
|Manufactured (mobile) homes|
|Build a home|
|Making an offer|
|For Your Protection Get a Home Inspection|
|10 Questions to ask a home inspector|
|12 ways to lower your homeowners insurance costs|
|Settlement Costs and Helpful Information|