It helps when the real estate market is doing well as it makes getting a home easier and allows for good Boston Property Management. However getting a mortgage can be quite tricky especially if you are a first time buyer. These tips will help you save time and money while mortgage shopping.
Get your credit report ready as that is the most important factor while searching for a mortgage. Lenders tend to look at your credit score to see if you are a viable candidate to get a loan. The credit score also affects the interest rate. This is why examining your credit report is important as you can see if everything is in order. Any mistakes can make you ineligible for a loan or the interest rates can go up making it unaffordable for you. Try and get your credit report six months before you apply for a mortgage so that you can fix any discrepancies.
Improve debt-to-income ratio
It’s a good idea to reduce your debt-to-income ratio before you apply for a loan. Make sure that your debts are reduced by paying off any loans, and making bigger payments on credit card debt. This will make you are a more suitable candidate for a mortgage.
Save enough for a Large Down payment
The best way to get a good interest rate and a lower closing fee is to save as much as you can for a huge down payment. The more you pay, the better it is for you in the long term. The issue with paying less than the standard 20 percent down payment is that you will have to pay for mortgage insurance, as your lender won’t increase their loss risk by loaning you money.
If you want to keep your new home only for a few years, then you can go for a hybrid mortgage. This is where you get a lower interest rate. The only risk with a hybrid mortgage is that if you end up staying longer than intended, then interest rates can spike or the housing market could be going through a bad phase. In case you don’t want that risk then you can go for a typical 15 or 30 year mortgage. This is a bonus if you plan to simply deal in Boston Property Management and make the money for the mortgage payments out of the rent.
Shop around for Lenders
Don’t just settle with the first mortgage broker you find. Search around for the right lender by looking online, in person or by phone. It helps to find someone who is willing to work closely with you. A good way is to go online and compare quotes from different lenders. This way you can find out which ones suit you and choose the ones who you feel more comfortable with.
Submit a thorough application
Make sure you have the entire necessary documentation ready, along with your application. Documents like tax returns, pay stubs, bank statements, and real estate contracts are required for an application.
Settle your interest rate
You can choose between settling the interest rate once you think it’s good enough or you could float your rate. Floating your rate allows you to move with the market till you are ready to close. This is beneficial if the rate ever goes down. It can be dangerous if the rate goes up before you close.
We hope you liked our guide “Boston Property Management: Mortgage Tips”.