Palmdale Mortgage

If you’re considering getting a mortgage, you need to plan ahead. There are many things that you can do now to help you get a better interest rate and lower closing costs.  Some of these things are very simple to incorporate,  while others will take a little longer to  do. This list of the things you should do to get the best mortgage possible.

You are entitled to look at your credit report once per year for free. There are many sites online that offer free credit reports. Once you have the report look for errors you can correct.

-You might think that you have enough for the down payments and closing cost, unfortunately, lenders often will look for additional funds available to you after payment for all the costs associated with buying a home, this is called reserves.  Lenders like to see seasoned funds, that is funds that have been on account more than 30 days.

 If you’re considering paying for anything no matter how big or small the amount might be, don’t. The reason for this is a minor charge on your credit card will be reported to the credit agencies and this can lower your credit scores.

Don’t change jobs in a different industry- You can change jobs as long as it’s in the same industry as you’re in now. The lender wants to give money to people that they feel are stable, one of these factors of stability is being in either the same job or industry for 2 years.

Get a part-time job in the same industry: As long as your second job is in the same line of work as your full-time job, you will be able to use that income in addition to your full-time income to qualify.

Save all of your cancel checks, bank statements, 401k statement, etc.  Anything that will help your financial picture  may be needed. This is especially true for people applying for an FHA with no credit scores or limited trade lines.  Lenders can and will use these “alternative credit references” to approve your mortgage.

Start learning about mortgages: This is the biggest purchase of your life. You should understand the process. If you do not make sure someone close to you does.

Remember to shop around: You can call a few lenders and see what they offer you, this will help you appreciate what your loan officer is doing for you.

 There might be some mortgage brokers or lenders that have done an exceptional job for their clients. Sometimes this information is available online. On the other hand there are dishonest lenders that have used bait and switch marketing or done other things that resulted in a negative review of them. This will help narrow the list of mortgage offices to contact.

 For those that have credit challenges.  Go to your local credit union or bank that does “secured saving loans”, make sure they report to the the credit rating agencies, and apply for a secured loan.  You will be required to deposit at least the amount that your borrowing with them and they will in turn give you a loan for up to that amount.

Why do you give them money and a minute later they loan it back to you?   The reason they are giving you a loan within minutes is they have nothing to lose. If you default on the loan, they keep your money, which is frozen until you pay off the loan. You are really just borrowing your money to the bank to have the bank borrow the money to you in exchange for a good mark on your credit report.

If you did everything in this list, I can assure you that you will be able to qualify for the best mortgage with the lowest rate and closing cost.  If it is not possible for you to complete some of the items listed, you might still be able to qualify for a mortgage, but it will be one with a higher rate and/or higher closing cost.