If buying a home is in in your plans for 2014, it’s time to start preparing for getting a mortgage. That means getting your finances in shape if you haven’t already and making sure that you boost your chances of being approved for a home loan.
The following mortgage tips should make it easier for you to get a home loan and purchase your new home:
  • Keep track of your finances: Thanks to new regulations on mortgages that went into effect in January, lenders will require extra proof that you’ll be able to repay your loan. Have documentation available for your finances, including W-2s, bank statements, investment accounts and even monetary gifts from family members.
  • Improve your credit: Aim for a credit score of 720 or higher to boost your chance of getting a loan with a good interest rate. Check your credit report for errors, and make sure you maintain low balances and send in all payments on time.
  • Keep debts low: Watch your debt-to-income ratio when applying for a mortgage. Having a ratio that’s too high will hurt your chance of being approved for a loan. Keep your debts about 43 percent below your income.
  • Look at alternative options: Consider applying for adjustable-rate mortgages, which can cost you less than fixed-rate loans. Opting for a seven- to ten-year adjustable-rate mortgage can save you even more money.
  • Think twice about FHA loans: FHA loans can make it easier to afford a home, but you’re now required to pay for mortgage insurance for the duration of the loan. Try to get a conventional loan instead.
Need more mortgage tips? Would you like to talk to our preferred lender? Contact your ERA Agent today.