One of the first things that New Albany home buyers must often do is secure a loan from a lender.
Thanks to the buyer’s market climate on the national housing market, loans have come with record low interest rates in recent months.
The downside is that lending standards are pretty tight.
Below, we’re going to provide you with tips on how you can successfully secure a loan on the New Albany real estate market.
Tips for How to Secure a New Albany Mortgage
Know your credit score. The higher the credit score the better in this current housing market, especially given the tight lending standards. So request your credit scores and credit histories from the top three credit-reporting bureaus. By doing so, you’ll have a good idea of where your score falls. Typically, lenders will not accept anything lower than a 680 for a Fannie Mae or Freddie Mac loan. Loans through the Federal Housing Administration will often accept lower credit scores than that, however.
Prepare Necessary Loan Application Documents. No matter where you go, your lender will likely ask you for the same basic documents, including your last two pay stubs, W-2s, income-tax returns and bank statements. So make sure these documents are easily accessible.
Know what you can afford. Take into consideration all of your regularly recurring bills and plan a budget. Make sure to leave room for savings and unexpected expenses!
Ask Different Lenders. You want to get the best loan you can possible get in terms of amount and interest rate. We have several preferred lenders that we work with who will make sure you receive competitive terms and will insure that the process goes smoothly. Just ask us for recommendations!
Consider Getting a Short Term Loan. While this may have been financially impossible for many home buyers in the past when interest rates were much higher, it actually may be possible and affordable to get a 15- or 20-year loan in today’s climate.
Keep Trying. Even if one lender rejects your application, there may be others who will accept it. So keep looking! It may also help to ask the lender why the rejected your loan application to see if there is anything you can do.
Receive some money to help with the down payment? Then make sure you can document it! Various lenders have different requirements on how much of your down payment can come from others as a gift and how much must come from your own funds.
Don’t Make Any Major Changes that Could Affect Your Credit. Even if your mortgage is approved, be careful not to do anything that could negatively affect your credit, such as applying for new credit cards, missing payments and financing a new car. After all, most lenders will check your credit again prior to the loan closing and many reserve the right to revoke your loan if they don’t like what they see.
New Albany Real Estate for Sale
We’d be proud to serve as your New Albany REALTORS and will offer you practical advice as well as helpful tools, such as:
Until next time,
Kate & Tony Thomas