LOOKING FOR A MORTGAGE BROKER? –
Now is the time when looking attractive to lenders is more important than ever. The pandemic has upended the real estate market. Inventory, especially homes in San Antonio, has hit record lows and buyers are facing fierce competition when it’s time to make an offer on a home. And while mortgage rates have also hit record lows in the last year, mortgage lenders have tightened their restrictions. When it’s time to buy a home, it’s important to put your best financial foot forward. Here’s what you need to do to make yourself more attractive to lenders in today’s market.
Get a copy of your credit report
Lenders will be looking at your credit report to determine your eligibility for a home loan. It’s absolutely essential that you know what’s on your report before you begin the mortgage approval process. You can request a free credit report from each of the three credit-rating agencies — TransUnion, Experian, and Equifax.
Fix mistakes on your credit report
You may be surprised to discover that your credit report contains errors. Unfortunately, this can be a fairly common occurrence. You may find your credit report lists debts you’ve already paid off, information that does not belong to you, or incorrect information about how or when debts were settled. It is up to you to fix these errors before applying for a mortgage. Give yourself plenty of time as it can take several weeks to several months to have these errors removed. We recommend getting a copy of your credit report at least six months before you plan to apply for a loan.
Improve your credit score score
Your credit score is a number that summarizes the information contained in your credit report. Lenders will look at that number to determine if you qualify and what your interest rate will be. Your credit score is determined by your payment history, how much you owe, how long you’ve had credit, what kinds of credit you have, and if any of your credit is new. The higher your credit score, the more favorable your loan terms will be. If your score is lower than you would like, then take steps to improve it before applying for your loan. Pay off debts and make all your payments on time.
Reduce your debt-to-income ratio
Your debt-to-income ratio is how much debt you have in relation to your income. It’s expressed as a percentage which is determined by dividing your total monthly debt by your gross monthly income. This ratio tells lenders how well you manage your payments and how much house you can currently afford. Having a low debt-to-income ratio is best, and most lenders look for 36 percent or less. You can lower your debt-to-income ratio by reducing your debt and/or increasing your income.
Make a large down payment
Finally, one of the best things you can do to make yourself more attractive to a lender is to have the ability to make a large down payment on a home. A large down payment means you’ll need to borrow less money and it will increase your likelihood of getting the home loan you want. Try to have at least 20 percent of the purchase price available for a down payment.
Need a referral for a mortgage lender? Please call Melissa Muse Wiggans, Owner and Broker of Real Estate Muses for recommendations. She works with mortgage brokers in the San Antonio and Austin, Texas area.
If you are looking for a real estate agent in San Antonio for either buyer or seller’s representation, or know someone who is buying or selling a home, contact one of our Realtors at 210-485-9913 or email us. Our team of top Realtors specialize in residential real estate for those buying and selling homes in San Antonio. We help military families who PCS as well as those moving or relocating to San Antonio, TX. Visit realestatemuses.com