Monthly Archives: August 2014

//August
27 08, 2014

What to know when applying for a mortgage as a couple

August 27th, 2014|Blog|

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After saying “I do”, for many newlyweds the next step is to purchase a home together. There are many factors that a lender considers when determining if a couple qualifies for a mortgage, including each spouse’s credit history, income and debt. Here are a few things to know when applying for a mortgage as a couple.

 

Credit History

The credit history of each spouse can affect whether or not they will qualify for a mortgage. When applying for a mortgage as a couple, the lender will look at each spouse’s credit report. Some couples may believe that as long as one person has good credit they can still get a low interest rate, but this isn’t always the case. Usually the lower of the two credit scores is used to determine the mortgage rate. To ensure you get the best rate possible, both parties need to maintain good credit before applying for a loan. If one spouse has weak credit, it might make sense for the partner with strong credit to apply for a mortgage loan on their own.

 

Income

When a married couple applies for a mortgage jointly, the income and financial assets of both spouses is considered by the lender. If both spouses have a stable income, this can significantly increase their purchasing power and strengthen the mortgage application.  If a couple uses their combined income, they will typically qualify for a higher mortgage amount than applying as a sole borrower.

 

Debt

When a couple applies for a loan jointly, it can increase their purchasing power, but a joint mortgage also requires that they combine their debt obligations. The debt of each spouse is taken into consideration and can affect whether or not the couple will qualify for a mortgage and for what amount.  Debt includes […]

21 08, 2014

Mortgage 101: The Loan Process

August 21st, 2014|Blog, Mortgage 101|

Loan ProcessThe loan process can seem overwhelming and intimidating to many potential homebuyers. Here is a guide to help you understand the steps involved in the mortgage loan process, so you can prepare and feel reassured before you begin.

 

 1.     Organize your documents

The more prepared and organized you are before you start the mortgage process, the smoother things will go down the road. Take a look at our mortgage checklist for some of the documents and paperwork you will need to supply to the lender.

 

 2.     Get pre-qualified

One of the first steps in the loan process should be to get a loan pre-qualification from a lender. A mortgage pre-qualification is an estimate of how much the lender thinks you could be eligible to borrow based on your basic financial information. This should be done early on, before you start looking at homes, so you know how much home you can afford. This way you can focus on properties within your budget and not get distracted by homes that aren’t the right fit financially. Pre-qualification is an important first step to prevent delays in your loan application.

 

 3.     Apply for a loan

Once you’ve found the perfect home, you are ready to complete a full mortgage application. The mortgage loan application form asks for detailed information about you, your finances, and the property you wish to purchase. You will need to supply the lender with all of the required documentation for processing. The lender will examine this information, as well as your credit history. The down payment and various fees will also be discussed at this time. The borrower will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL) […]

14 08, 2014

FICO Scoring Changes Could Help Borrowers

August 14th, 2014|Blog|

FICO

FICO, the most widely used credit-scoring system, announced last week that it will soon change some of the criteria it uses to calculate consumers’ credit scores.

The changes include reducing the impact that overdue medical bills can have on credit scores, as well as removing paid off collections from consumers’ credit scores.

According to The Wall Street Journal, of the 106.5 million consumers with a collection on their credit report, 9.4 million did not have a balance. With the new credit-score system, those 9.4 million consumers won’t be penalized. The new FICO scores will ignore any collections that have already been paid off. The previous version factored paid and unpaid collections equally.

The latest version of FICO’s scoring system will no longer weigh medical debts as heavily as it previously did. Individuals who have an otherwise clean credit history, except for unpaid medical debts, may see their FICO score increase by as much as 25 points. This means consumers may qualify for more favorable interest rates on loans, which could save them thousands of dollars.

The changes come after a recent Consumer Financial Protection Bureau study, which found that consumers may be unfairly penalized for medical debts that go to collections. Unpaid medical bills are different from other unpaid bills.  In some cases, medical bills end up going to collections because of a billing error, and consumers may not even be aware that the debt was sent to collections.

The FICO changes will go into effect this fall. Unpaid debts will not be removed from a credit report with the new credit scoring changes, so lenders may still factor that information into their lending decisions.

 

7 08, 2014

Top 3 Things First-Time Home buyers Overlook

August 7th, 2014|Blog|

First-Time Home buyers

It’s easy to get caught up in all the excitement when buying your first home and overlook some important things. Make sure you don’t forget these commonly overlooked items when buying your first home.

 

1.       How much closing costs can be

Closing costs are fees related to services that must be performed to complete a home loan. Many first-time home buyers are surprised by the additional costs and fees required to purchase a home. On top of the down payment, the buyer must also pay a variety of closing costs to finalize the purchase of a home. Because these cost can be quite substantial, it’s important to factor them into your home buying budget to ensure you have enough money saved up when it’s time to sign on the dotted line.

 

 2.       How costly repairs are

Potential home buyers often underestimate the costs of home maintenance and repairs. When you own a home, it’s your responsibility to pay for any repairs that are needed to maintain your home and to replace anything that breaks. If your fridge or air conditioning unit breaks down, you may find yourself having to shell out a substantial amount of money unexpectedly. So it’s important that you have some money set aside in case unexpected problem like this arises.

 

 3.       Property taxes and homeowner’s insurance

Just because you can afford the monthly mortgage payments doesn’t mean you can afford everything else that comes along with owning a home. In addition to monthly mortgage payments and interest, you’ll also have to pay property taxes and homeowner’s insurance.  So, if a home is at the top of your budget, you may want to keep looking. Don’t forget about all the additional monthly expenses that come along with home ownership, or you may find […]

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