Qualifying For A Home Loan In 2016

Getting approved for a mortgage loan is not something that is second nature to most of us.  It is something many will only do a handful of times in their lives.  With concern in the market about rising interest rates the spring of 2016 is seeing many first time home buyers jumping in on the real estate scene.

Qualifying for a home loan isn’t as simple as getting a car loan which is something first time home purchasers don’t realize.  Put your anxiety to rest with proper preparations.  Educate yourself on the preapproval process, home buying process, mortgage process in order to less the stress that comes along from those unexpected surprises that occur along the way.

First things first; if you are thinking about purchasing a home anytime soon take a few minutes and pull a copy of your recent credit report.  Your credit score will be one of the most crucial elements in identifying your credit worthiness.  This numbers allows lenders to place a value on how risky lending money to you is.  Don’t assume your credit is good enough to qualify for a home loan.  Take the time to review your entire credit report.  Take time to clean up any errors that exist while working to maintain on-time payments decreasing your overall debt ratio.

Cash is king.  When you are looking to purchase a home it is crucial that you have access to cash.  Mortgage companies differ in the loans that are offered to individuals.  Most companies however require a substantial down payment to ensure that the individual is vested in the purchase.  Without a reasonable down payment home purchasers are often penalized by having to take out private mortgage insurance.  This can add hundreds of dollars to your monthly mortgage payment none of which is applied to your actual mortgage premium.

Stay working at your current job until after you have received a mortgage.  Changes in employment while applying for a mortgage can stop or greatly delay the process.  It is crucial that you stick with your employer and your current income status throughout the mortgage process in order for a smooth transaction.

In the months before obtaining a mortgage preapproval it is important that you work to save money, pay down debt and that you avoid any new debt.  This doesn’t mean you have to have all of your credit cards and loans paid off in order to obtain a mortgage but lenders will look at your debt to income ratio when determining how much you can afford to take on.

Just because you are preapproved for a mortgage doesn’t mean that you have to purchase a home of that value.  It is important that you are comfortable with the payment.  If you are used to traveling or such and will not want to stop doing that just because you now own a home consider that when looking at houses to buy.  It is okay to buy a home that has a comfortable monthly payment over one to fulfill the preapproval amount.  Just because it costs more doesn’t make it right for you.

There is a lot of consideration that go into obtaining a mortgage.  When getting serious about finding a home meet with a local mortgage broker to go over available options and to begin the preapproval process.  This will ensure that you have the right guidance throughout one of the largest financial commitments you will make in your lifetime.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Tips On Qualifying For The Lowest Mortgage Rate and Best Home Loan

2015 was a year known for consistency when it comes to mortgage rates.  On average home loan rates stayed around four percent throughout the year.  The same is not to be expected for mortgage rates in 2016. The National Association of Realtors says it expects to see rates upwards of four point five percent by the end of 2016.  The rise in interest rates will have an effect on the housing market.  It is important to note that even with the increase expected to be seen during the year that the rates being seen are still at an all time low.  It isn’t necessary to panic but instead to be cautious when seeking to buy a new home or refinance and existing loan.

To ensure you qualify for the lowest mortgage rate and best possible home loan follow the advice below.

• Enhance Your Credit Summary: A lender first looks at a buyer’s credit profile on a whole when determining if they are a financial risk that they are willing to take on. When you are looking to buy a home or refinance an existing loan it is important to manage your current debit.  Be sure to pay your bills on time and pay more than the minimum on all outstanding credit card balances.
• Start Hording Funds For A Down Payment: When a buyer puts less than twenty percent down on their new home they are often forced to pay what is known as PMI, primary mortgage insurance. This can raise the monthly payment of your loan upwards of fifty dollars each month.  These funds go towards an insurance that is paid on your behalf to the mortgage lender to insure the mortgage.  It is better to have fifty extra dollars each month going on the principle mortgage payment over insurance.  A home can be purchase with less than twenty percent down however buyers should be conscience of the extra monthly expense.
• Work With A Mortgage Broker: So much more goes into obtaining a mortgage than just finding a low interest rate. There are many programs available to home buyers as well as an abundance of financing options. A mortgage broker can help find a loan that caters to your specific financial situation.  They will seek out a variety of options from a variety of lenders and present you with the best scenarios from each to assure you are getting the best deal for your all around situation.
• Learn About Loan Types: As mentioned above there are several types of mortgages available.  Just because a friend has a fixed rate, thirty year mortgage does not mean that is the best option for you.  The same is true for an adjustable rate home loan.  Different situations call for different mortgages.  Learn about each option and ask about how each will affect your mortgage.

Buying a home is a complex process.  Working with professionals within the industry will help smooth the transition into home ownership.  It is advantageous for buyers to seek assistance from real estate professionals, mortgage experts, home inspectors and real estate lawyers when purchasing a home.  This will help to ensure a positive transaction and beginning in your new home.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

It’s Time To Buy A Home

The busiest season for the real estate industry is the spring.  With temperatures on the rise signs of life begin to be seen all around us.  Flowers are blossoming, trees are blooming and homeowners are hitting the market with fresh listings.  With spring comes a renewal in life, potential and inspiration.  Spring is seen as the perfect time to take on a new adventure. 

This is just one of the reasons why we see an increase in real estate transactions.  Both buyers and sellers alike are looking to find a perfect match and be on the path of a new journey.  Many real estate articles are centered on sellers and tips to selling a home however this leaves many buyers looking for tips of their own.  Below buyers will find helpful industry tips to successfully purchase a home this spring.

1)      Hire A Real Estate Professional 

A real estate agent is so important to the home buying process.  An agent that specializes in local real estate serves so many purposes from tour guide to financial advocate.  Hire an experienced agent.  When chosen carefully a realtor will represent your best interests in all transactions throughout the entire buying process.  Buyers agents not only work to find the buyer the home of their dreams, they help with contractual paperwork, all negotiations, home inspections and concerns as they arise during the process.

Many buyers believe they cannot afford a real estate agent.  This is however the furthest thing from the truth. In fact you can’t afford not to hire a realtor.  It costs nothing to hire a buyer’s agent; in fact the seller of your dream home pays the commission so you have nothing to lose.

2)      Get a Financial Profile Analysis and Mortgage Pre-Approval

Come up with a budget that helps you determine how much you are comfortable spending.  This is a good place to start initially.  Once this is completed it is important that you meet with a mortgage broker to examine how much money you are qualified to borrow.  Do these two things before ever touring a home.  If you meet with a mortgage specialists who says you are pre-approved for a two hundred thousand dollar mortgage but you are not comfortable with the monthly mortgage payment that comes along with it don’t tour homes with that price point. 

Pre-approval on a mortgage helps to ensure that you will be taken seriously by sellers.  It is more likely with a pre-approval that the bid you submit will be taken serious and that sellers will see you as an attractive buyer. 

3)      Determine Your Needs Verse Your Wants

All buyers have their own list of needs when looking at buying a home.  Some families want to live near a good school system; others want big yards with area for their children and pets to roam.  Some want easy commutes to work or specialized rooms like libraries and woodworking.  Only you as a buyer can articulate what you desire out of your new home.  Be sure to create a detailed list of the musts such as three bedrooms and two baths along with a list of wants such as a large basement and laundry off the kitchen.  This will help to ensure that the real estate agent can better access homes to make sure they aren’t wasting your time or theirs on homes that don’t meet your needs.

The process of buying a home is simplified with the help of a professional real estate agent.  Find a local realtor online to help you through the home buying process.  Find out more about hiring a real estate agent who is ideal to assist in the home buying process on our blog.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Getting A Mortgage With Less Than Perfect Credit

Many people seeking to purchase a home think that because of their less than perfect credit score that they are not going to be eligible for a home loan.  This is no longer the case.  With less stringent requirements, more flexible mortgage options and historically low interest rates on home loans getting an affordable home loan even with a low credit score is feasible.  Here are a few things that you will need to take into consideration if you are seeking a mortgage with a low credit score.

• Be Prepared To Pay More

Although homeowners with bad credit can be approved for mortgages it is important that they realize they will be paying more than those with decent credit scores.  Be careful when seeking out a mortgage broker to be sure you are working with a home loan officer looking to provide you with the best mortgage for you.  Watch out for dodgy characters looking to prey on individuals who they view as less than financially savvy because of their low credit scores.  This is often the perception of buyers with less than perfect credit scores.

• Refinance As Soon As Possible

Don’t think that a low credit score means you are signing your life away when you purchase a home.  Buying a home should never be viewed as a bad deal.  It does however mean that you need to maintain and improve upon your credit and refinance as soon as you are no longer viewed as a risk to lenders.  This can take as little as two years if you are consciously working to improve your debit to credit ratio.  A home loan when you have a low credit rating should be seen as a short term solution that is used to get you into a home while you work on improving your credit.  It is always a better solution to sock away money into the equity of a home than wasting money on rent payments.

• Understand Your Options

Work with a mortgage officer that specializes in obtaining mortgages with less than perfect credit.  Ask about the available options.  Although thirty year fixed mortgages are popular this does not mean it is the right option for your situation.  An adjustable rate mortgage may be a better option while you work on fixing your credit score.  Many people fell on hard times during the recent recession that are not typically bill skippers.  Hard-working, responsible people often have legitimate reasons for falling into a vicious cycle of late payments.  Consider all of the options you have when you are looking to become a new home owner.

• Obtain A Co-Signer

If you have a substantial number of assets with equity you may not need a co-signer even with poor credit.  Items such as motor homes, cars paid in full all work as forms of collateral against default on a mortgage and are seen as beneficial to lenders.  However, if this is not the case you may need to look for a relative who is willing to sign on your behalf.  A co-signer is essentially agreeing to make payments on your behalf if your loan should default at any time.

Although homeowners with credit on margin will pay lower rates than those with less than perfect credit it is possible for most everyone to obtain a mortgage in 2016.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Low Credit Scores Do Not Mean You Will Be Denied A Home Loan

Consumers with a low credit score fear loan denial which often prevents them from applying for a mortgage.  In 2016 the fact that you have a low credit score should not stop you from meeting with a mortgage broker to discuss options available for consumers with credit scores below six hundred.

The higher the credit score; the more likely it is consumers can repay the loan according to most mortgage lenders.  This does not mean that consumers with less than perfect credit should not consider buying a home.  What it does mean is that homeowners with credit scores under six hundred need to keep in mind a few things as they go through the process of buying a home.

Lenders are loosening their credit requirements for homeowners.  In fact thirty three percent of mortgages in the spring of 2014 were given to borrowers with credit scores below seven hundred; a six percent increase from the previous year.  Mortgage lenders are relaxing their credit score requirements and beginning to lend money to homeowners with less than perfect credit scores.  This is especially true when borrowers opt for government-insured FHA loans.  Homeowners with credit as low as five fifty, with down payments of ten percent are getting mortgages.

When consumers are looking to purchase a home with less than perfect credit there are a few things to consider.  One is that lenders are slowly becoming less strict with requirements on consumer credit scores.  Another is that lenders are becoming aware that there is a difference between applicants who are just irresponsible in making payments on time and applicants who have fallen on hard times with the loss of a job or astronomical medical bills that create an unreasonable debt demand.

When it comes to having less than perfect credit scores, lenders are becoming more and more concerned with payments that are being made on time.  When an applicant is making payments on time, especially rent payments, lenders are more willing to consider lending to them.

Working with a mortgage broker helps consumers looking for a mortgage with less than perfect credit.  There are two different methods uses when approving and denying mortgage.  Lenders either approve or deny your mortgage based on automated or manual underwriting.  When a client is considered a worth credit risk mortgage brokers will initiate conversation between lenders to get them to look at more than the client’s approval or denial within the automatic mortgage approval system.  In these situations mortgage lenders are prompted to look into the other qualifications borrowers bring to the table.

Just because your credit is less than perfect it should not prevent you from at least meeting with a mortgage broker regarding the options that are available in your situation.  A lender may offer you a mortgage with a higher interest than those consumers with impeccable credit.  This however does not lock you in forever.  As you continue to get your credit in check your score will increase and overtime this will allow homeowners with higher interest mortgages to refinance their current mortgage at lower interest rates.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Finding And Financing The Perfect Home For You

Buying a home is something that requires a lot of time, effort and is simplified when a plan is in place to help manage the process. Below you will find steps that will make your home buying process easier to handle.

Begin Researching Early On: It is never too early to start looking into what is available within the real estate industry.  When you find a home that interests you take notes on how long the home stays on the market, how many times the asking price changes.  This information will give you an idea on what trends are currently happening within the local housing industry.

Establish What You Can Afford To Spend: Most mortgage brokers recommend that homeowners look for homes that are no more than three to five times what their annual household income is. A down payment of twenty percent os recommended as is decreasing the amount of debt you are carrying.  These determinations should be based on your personal financial status and what you feel comfortable with.  It is not as important to focus on the three time your annual income and twenty percent down payment rules but more your personal comfort.

Obtain Prequalification On A Mortgage: Meet with a mortgage broker to determine exactly how much you can qualify for.  As a preapproved or prequalified buyer, sellers are more likely to consider your offer.  The mortgage officer will obtain a credit report, information on your income and debt ratio and other crucial financial information. 

Locate A Local Real Estate Agent: Partnering with the right real estate agent whether looking to buy or sell a home is crucial.  Local realtors are the best source of information on the area and can be extremely valuable in helping you find the home of your dreams. 

Shop For And Make An Offer On A Home: Your real estate agent will get a list of homes available that meet your wants and needs while being within your budget and locations of interest.  When look at a lot of houses all within a short period of time you can become quiet overwhelmed.  Be sure to take pictures and videos as you go; make notes on as you go as it will help you remember each home and what features you like and don’t like about certain homes. 

Home Inspections Are Important:  Any home that you are serious in should be inspected by a professional home inspector.  Before you spend money on hiring an inspector there are a few items that can you can inspect on your own:

• Turn all of the plumbing on throughout the home to test for water pressure. Identify how long it takes for the water to get warm and how long the hot water lasts.
• Test the electrical systems on within the home. Turn the lights on and off in each room while also testing ceiling fans and more.
• The windows need to be tested as well. Open and close them to see if they work properly while checking out the seal and caulking around the windows.

Evaluate the Neighborhood:

• How are other homes within the neighborhood maintained? Are they well landscaped; does it look like people take care of the exteriors of their home?
• Is there a lot of traffic on the streets outside of and around the home?
• What is the parking like around the home?
• Is the home located near places of interest to you? Are you able to get to and from places you need and want to go without trouble.

Work With A Mortgage Loan Officer To Get The Right Mortgage: Mortgage lenders have a wide variety of loan options that they can offer to perspective home buyers.  Depending on the type of home, your military background, home buying status, your credit rating and more will influence the type of mortgages that you qualify for.

Coordinate Paperwork and Closing:  Last but not least get ready to close on your home loan and move into the home of your dreams. 

The home buying process is something that can be managed with the right people and steps in place.  Be sure to surround yourself with people that have the same goals and objectives in your home buying process in order to ensure successful transactions throughout the process. 

Mortgage Rate Expectations In 2016

No one, not psychics or clairvoyants, economists or analysts know for sure what is going to happen to mortgage rates in 2016.  After the surprising twists and turns within the housing market over the past decade and the credit crunch of 2007 into 2008 the only thing for sure is that economic forecasting is no more reliable than astrology as the late professor of economics at Harvard, John Kenneth Galbraith stated.  This does not mean however that speculation about the 2016 mortgage rates is futile.

It is unwise to go through the year without a forecast.  Some thought at what our credit market will possibly look like based on the current economic situations, historical data and trends are necessary.  It may not prove to be one hundred percent spot on but time and time again it has been proven that the more we know the better off we can prepare for the future.

It is unwise of homeowners to expect the crazy low rates that are currently “normal” to remain.  If you look into the archives of Freddie Mac you will see that it has been more than five years since the rates on a thirty year fixed rate mortgage were over five percent.  In fact, this decade has reached an all time low point.  Near the end of 2012 the rates were at three point thirty five percent.   Currently, the thirty year fixed rate mortgage rates are a little over four percent.

Consumers will look at this as a new normal when in fact this is far from normal and is in fact exceptional.  Although it is not expected that mortgage rates continue to rise at any significant levels it should not be forgotten that there was a time in our not so distant past where normal thirty year fixed rate mortgage rates were above ten percent reaching a high around eighteen point forty five percent.  This wasn’t that long ago, in fact these rates were found in October of 1981, only thirty five years ago.  This was in fact when many of us were in middle school.  Think about it; that really isn’t too long ago.  Consider what the rates will look like when your middle school aged children are middle aged; can our economy continue to grow with rates under five percent.

It is probably unlikely that any economists would bet that we will see mortgage ratesreach those all time high’s again in our lifetime but to stay at the low we are currently experiencing is unlikely over time as well.  What you will find mortgage analysts saying is that the “normal” we are experiencing at the moment are unlikely to be permanent just as the high’s of the early eighties were unlikely to become continue for years to come.

There are many variables when it comes to our economy and mortgage rates.  The timing of when mortgage rates will increase and decrease is anyone’s guess.  The inevitability of the situation however remains the same; mortgage rates will continue to increase and decrease throughout time depending on a number of variable situations within our own economy and that of the economies we rely on outside if the United States.

Continue to look for the increase in the current economy with low inflation and low unemployment to increase mortgage rates slightly.  As we continue to see peeks in incomes, spending, consumer confidence, manufacturing and the gross domestic product we can expect strong mortgage rates with increasing.  The faster the economy grows the more the mortgage rates will spike and at a greater pace.  What we look for going forward is consistent growth that paces itself in order to prevent a major spike in mortgage interest rates for 2016.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.