Homebuyers can generally boost their chances of getting financing at terms they can afford by taking the following steps.
1.Consolidate all bank accounts
Consider putting all of your funds into the lending institution you have dealt with the most and longest. This may enhance your chances of getting a loan at favorable terms at that bank. Naturally, you should make this move when you feel ready to start househunting. Don’t wait until you have applied for the loan. If a relative is helping you out with a cash gift, deposit it in an interest-paying account at that bank. Also, go ahead and get the letter from that relative stating that the money was a gift. You will need that down the line.
2. Cut Down On Your Debt
You may be spending too much or your income on items you can do without. For example, if a large portion of your paycheck is going to pay off two cars, consider selling one car. Take other steps to reduce debt before applying for a home loan.
3. Follow This Checklist
Here are the facts a lender will need to know when you come in to apply for a loan. Saving time can often save you money; so make sure you have all of the following data ready:
- If you are married, yours and your husbands job history, complete with past as well as present employers, duties of said jobs and above all the salary. If you are not married then have all of this info available for yourself
- The total amount of cash the family now has on deposit and where, if it is not at the financial institution where you are applying for the loan.
- All additional income, such as stock dividends, interest on savings accounts, etc.
- The value of any real estate you own, including its location, condition, and the length of time owned.
- The current depreciated value of any of the family car or cars
- The current value of any other major possessions.
- The face and the cash value of any life insurance policies, and the name of the company that wrote them.
- The total amount of all outstanding debts, including home mortgage, car payments, credit card charges, department-store bills, as well as the amounts paid regularly on each.
- Personal and credit references, complete with names, addresses, occupations and phone numbers.
4. Consider Getting A Longer Pay-off Time
The longer your loan, the lower your monthly payments. Say you need to borrow $60,000 at 13% interest. Your monthly payment on a 20-year mortgage will be $703.20 or $8,438.40 per year. But your monthly payments on a 30-year mortgage–same amount, same interest–will be $663.60 or $7963.20 annually, a saving of about $475.00 a year. Of course, your total interest cost is going to be higher over the longer term. Be sure to take that into consideration before you decide. If you don’t expect to live in the house very long, the 30-year mortgage may be the better choice.
Over the next 14 day’s, this series will cover fourteen way’s to finance your home. So, if you are in the market to purchase a home, this series is for you. See you right back here tomorrow for the first way.