If you’re currently in the process of becoming a homeowner in the United States, locating homes that you have the means to afford may not be the only issue you face. There have been many homeowners that have found the perfect home for them and their families but have difficulties in getting approved for a mortgage. When looking to attain a reasonable mortgage deal, there are certain guidelines you should adhere to in order to increase your chances of being accepted.
Freeze your credit score
Once you feel like you have a credit score you feel comfortable applying for a home loan with, do your best to keep it. Freeze your credit score by refusing to make any unnecessary inquiries for credit cards or any other form of loans. A good rule of thumb to follow is that the higher your credit score, the higher your chances of receiving a lower rate on your mortgage.
Strive to increase and maintain a credit score of 760 or higher in order to be considered for that dream home. You should steer clear of making any large purchases within 90 days of applying for a home loan. Even if the balance is completed paid for before you apply for the loan, you may notice your credit score drop.
Take your time
Many contracts associated with home purchase will only offer you about a 10 time frame in order to make a decision on the home. Make sure that you ask the agency for more time so that you can weigh all of your options before making such a significant decision,.
Gather a minimum of 6 estimates
Searching for national lending firm may provide you with a reliable lender at rates you can actually afford. Aside from researching national lenders, check with your local bank or credit union to evaluate what options they may provide. Make sure that you remember to ask the lenders for an estimate on the final closing costs which some may not provide if you don’t ask.
Only pay to lock for time needed to close the loan
The typical time needed to close a loan is about 2 months (mtgprofessor.com) and asking for an extension may cost more than you expected. Be sure to ask your lender the amount of time they will be required to complete the loan and make sure that you the lock period equals this time frame and not a day earlier.
Strive to attain Adjustable Rate Mortgages
If you’re absolutely sure that you will not occupy your home for more than seven years, adjustable rate mortgages may be extremely beneficial. The current percentage on an adjustable rate mortgages held for 7 years is a little above 3% while the percentage on a 30-year fixed rate loan is well above 4%.
Consult a Loan Broker
If you are in need of a large loan or have any other peculiar loan needs will have the best opportunity to obtain a great mortgage deal from an expert broker with a large network of lenders.
Follow these 5 ways to get a great mortgage deal will put you in a better position to be approved for a mortgage loan. If you’re in the market for a home make sure that you properly allocate your time towards finding affordable homes as well as increasing your chances of qualifying for a home loan.