Press Release (ePRNews.com) - ISLAMORADA, Fla. - Feb 22, 2017 - Per Jan Keller, Top Producing Real Estate Agent for Coldwell Banker Schmitt Real estate and owner of Kellerporterteam.com-Everything about Real Estate in Islamorada and the Upper Keys,”
Lenders are risk averse and this shouldn’t come as a surprise. Each loan has potential to go unpaid, leaving the lender in a bad situation. Also, federal and state guidelines play a role in determining who is and isn’t qualified for a home loan. So, you need to be well prepared before you apply.
Here’s some helpful advice for how to improve your chances of being approved for a mortgage:
● Save a good down payment. A down payment can be as low as 3.5 percent for some loans. However, the bigger your down payment, the quicker you’ll build equity and the less your monthly mortgage payment will be. It’s best to save a down payment equaling 20 percent of the purchase price. This way, you’ll also avoid paying PMI or private mortgage insurance, which is for the lender’s protection, not yours.
● Clean your credit report. There’s a high probability errors are on your credit files. Go to Annual Credit Report.com and order your credit reports from all three bureaus: Experian, Equifax, and TransUnion. This is sponsored by the federal government and is free once per year.
● Stay with your current employer. Lenders do not like change and if you do change jobs (or worse yet, careers), you might not receive approval. Stay with your current employer at least through closing.
● Borrow less than you are able. Your DTI or debt-to-income ratio is a very important number. When you are pre-approved, shop for a house that’s under your maximum lending limit to reduce your monthly payment and increase your chance of final approval.
● Have cash on-hand for closing costs and other expenses. An earnest money deposit, inspections, moving, closing costs, and miscellaneous expenses will all be your responsibilities. You need the cash to pay for all of these and to improve your chances of being approved.
● Don’t incur any new debt or open new lines of credit. A big time no-no is to open new lines of credit or run up balances on existing credit lines. This will impact your DTI and could cause loan denial.
Just being smart, disciplined, and patient will go a long way in being approved for a home loan. For more information about Luxury Homes for sale in the Upper Florida Keys, please contact Jan at http://www.islamoradajan.com
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