The fact that you are interested in ways to improve your chances of getting a mortgage loan means that you are aware of the importance of acting cautiously with your finances, especially when it comes to your credit.
Since the recession of 2008, mortgage writing – or the criteria that banks use to determine a loan – has become much more strict and regulated. To get a mortgage loan, you’ll need to provide a wide variety of information regarding your financial obligations and credit history.
The McAllen realtors of Equity Assets Realty are dedicated to helping clients find the home of their dreams and securing mortgage loan approval from quality mortgage lenders. We are eager to guide you through the entire process and that means also providing you with the information you need to improve your credit history, as well as tips on how you can avoid bad habits that can reduce your chances of securing a mortgage loan.
That beautiful home you’ve always dreamed of can soon be yours with some careful planning.
To-Do Prep List for the Mortgage Loan Application Process
1. Sum up your monthly income and your monthly debt obligations.
First off, know your monthly earnings and collect current pay stubs as the lender will request at least a month’s worth of proof of income. If you are self-employed, the lender may request additional documents. Along with pay stubs, the mortgage lender may also ask to see previous tax returns.
Your lender will also take note of your monthly debt payments including student loans, auto loans, and credit card minimum payments. A high debt rate may reduce your chances of getting a mortgage loan. If possible, try and pay off these loans prior to applying and avoid taking out new credit.
2. Check the status of your credit and protect your score.
Before you apply for a mortgage, get your credit score and credit history report. Check for errors and any significant debt sums that could ruin your chances of getting a mortgage.
A good FICO credit score should be about 700 or up. With scores less than 680, you may only have a chance of getting the loan if you are allowed to sign with a highly qualified co-signer.
Maybe you could even take the time to try and raise your score before applying. Again, avoid opening new lines of credit in the months leading up to your application as your mortgage broker will inquire about them.
3. Calculate your mortgage budget.
You should stop and think about both how much you can afford and how much you are willing to spend on your mortgage. It’s typically recommended that you pay 25 to 35 percent maximum of your gross monthly income into your monthly home mortgage payment. However, it is ultimately up to you if you wish to pay a lower percentage.
Of course, this percentage will never be completely accurate due to additional housing fees such as property taxes, mortgage interest rate, home insurance, etc. When setting your budget, add a buffer for these sorts of fees.
4. Plan For Your Mortgage Down Payment.
Now that you have sorted everything out and are ready to purchase your new home, plan how much you will give on your down payment. Your mortgage lender may expect a 10 percent down payment, but if you have more, consider putting up to 20 percent down.
Remember to stay rational and true to your budget, and do not let lenders or real estate agents try and convince you to put more money into a home mortgage payment than you are comfortable with.
Avoid These Bad Credit Habits to Increase Your Chances of a Loan Approval
Always remember that your credit is an important factor in your ability to secure a mortgage loan. You will want to protect, defend, and improve your credit history in order to increase the likelihood for eligibility.
Avoid these 5 bad credit habits that can seriously ruin your credit history:
1. Failure to make payments.
Late payments on student loans, auto loans, and even credit card monthly fees can cause your credit score to lower by up to 100 points. Even miscellaneous debts from library fees, medical bills, and parking tickets can appear on your credit history.
Try and clear up these records to avoid jeopardizing your chances of acquiring a mortgage loan.
2. Overusing credit card accounts.
Did you know that credit card history comprises up to 30 percent of your credit history report? This means that you should avoid overspending on even your lowest limit cards.
Overspending on credit accounts is one way to disqualify yourself from getting that mortgage loan.
3. Opening new lines of credit.
In the months leading up to your mortgage loan application, new lines of credit can look suspicious. Although it can be tempting to get that furniture store credit to decorate your new home, its ultimately best to wait until after the mortgage is approved. New lines of credit do not look good on your application.
4. Closing unused accounts.
Another way to concern the lender is to close lines of credit, even if you are not using them at the moment. In only a few instances can it help your score. More often than not, it will hurt your chances of getting approved.
5. Disputing a credit account.
If you try to dispute an account that is under investigation by the credit bureau, you can delay the process of getting a loan or alright kill the likelihood of getting approved. It seems like you’re covering up bad credit habits, so just avoid disputing any accounts.
Selling a house isn’t the easiest process. It involves plenty of hard work, time, lots of paperwork – and even sweat.
Timing also plays a very important role when it comes to selling your home.
Fortunately, the McAllen realtors at Equity Assets Realty have the experience, and understand all the nuances to make sure the home selling process is as smooth as possible for you. Below we have compiled a number of factors you’ll want to consider when deciding when to sell your home.
The Best Seasons
The warmers seasons tend to improve the speed and eagerness of buyers, especially during spring.
Another benefit of selling during spring, especially around April, is that many buyers have extra funds because of their tax returns and are thus able to afford some of the additional costs that go into purchasing a new home.
Additionally, the warmer weather allows for easier moving conditions. If timed accordingly, the buyer will also be able to take advantage of summer vacation. This will allow the buyer the opportunity to place their child in a new school before school starts up again.
With that being said, the best time to list your home is between the end of spring and mid-summer. According to Zillow, houses sold during the first two weeks of May, especially on Saturdays, sell almost two weeks faster than average and for up to $2,500 more in comparison to the national average.
The Best Market Time
Another factor to take into account when considering to sell your home is the local market and job growth. If job growth is low, there won’t be as many potential buyers. Naturally, if there’s an abundance of jobs, people are likely to be flowing into your city, which can potentially increase the value of your home.
When it comes to the housing market, there are two trends to be aware of:
A buyer’s market happens when there are more houses for sale than there are buyers. This means you’ll find more eager sellers (a.k.a. competition). In this market environment, you might find yourself being forced to sell at a lower price and/or making additional concessions with the buyer.
This market environment can be identified by the low amount of houses for sale and a great inflow of buyers. You can sell your house at a higher price since there are fewer options and a greater demand – and it will sell faster.
The Best Time for You
It’s important to recognize that selling your house doesn’t happen from one day to the next. Decide when you want to close a deal and then count backward to get your start date.
Then you’ll need a realty agent. The agent will need to gather information about your house including the number of rooms, bathrooms, dimensions, as well as check to see if there are any upgrades needed. Next, they will need to take pictures of the house to stage it – some realtors may even take video. This portion of the selling process usually doesn’t take more than a week.
With the pictures and information, your agent will place your house in different listing services for potential buyers to find.
Then comes the waiting game. According to data from Realtor.com, during the months of April and May in 2018, properties lasted an average of 55 and 59 days. After that, it can take 50 days to close on the sale.
Some additional factors which can impact the amount of time it takes to sell your house include:
Lifestyle changes: If you’re moving because of a job, you’ll want to ensure you are following a strict timeline in order to have everything settled before you start your new job. Or if you have children and you want them to enter a certain school in a different school district, you will need to have everything done before school starts. Just take into consideration your lifestyle expectations.
Emotional preparedness: Your house was your home; it’s important to make sure you are emotionally prepared to leave it behind.
Financial benefits: Being able to sell for a higher price will help you put down a healthy down payment on a new home. Be aware that sometimes opportunities arise and it’s your decision whether or not to take them. Always think through the pros and cons.
Finding an agent: It is important to take your time finding an experienced realty agent you can trust and feel comfortable with. You will be communicating with this agent for a meaningful amount of time and a healthy relationship is going to be important. Finding experienced agents like the McAllen realtors at Equity Assets Realty is important to making the sale.
Repairs and upgrades: The house inspection may reveal problems and issues that will need repairing. These upgrades can take a while and the house won’t be sold until they are done. You may also want to make some upgrades on the house to increase its value.
If you’re looking to sell your home, 2019 is the year for you. Of course, there are a lot of little nuances that can affect your ability to sell your home and so you’ll want to have a plan in order.
If you’ve been wondering if 2019 is the right time to sell your home, the answer is definitely, yes! Let the expert McAllen realtors at Equity Assets Realty give you the tips to accomplish your goals in 2019.
Reasons to Sell Your House in 2019
1. Selling Your House in 2019 vs. 2020 (or 2021)
Forecasts suggest that 2019 will be an economically stable year. A study conducted by real estate database company Zillow surveyed 100 U.S. real estate experts in which it was concluded that about half of the panelists expected a recession to come in 2020, while others believed it wouldn’t come until 2021.
In other words, if you are debating whether to sell your house sooner or later, you should definitely go with sooner.
2. There Are Plenty of New Buyers
Despite interest rates increasing, there is still a steady inflow of new home buyers into the market.
While there may not be an overabundance of bidders, there are sure to be enough new buyers interested to help move your home. According to a poll conducted by Trulia in November of 2018, Millenials are the new wave of home buyers, with one-fifth of Americans between the ages of 18 and 34 looking to buy a house in the next 12 months.
It’s worth noting that the market is not at it’s highest peak, however. So if you notice your house staying in the market a little longer than longer, this is to be expected. You can – and will – sell your house.
3. You Have High Equity
If you bought your home close to the 2007-2009 recession, chances are you purchased it with low interests rates and an equally low price.
Your home equity is the difference between what paid and owe and the home’s current market price. Chances are your house has rapidly appreciated over the last decade and your equity has grown with every mortgage payment you have made. The higher your equity, the more you will get paid for your house, and the better a down payment you can put down on your future home.
4. Interest Rates Are Still Low
While interest rates are not at their lowest historical point, they are definitely far from being at their highest.
Current rates may encourage many homebuyers to take the leap this year before the rates go up again. It should also encourage you to sell as soon as possible.
The longer you wait, the higher the risk the rates go too high for you sell within a reasonable amount of time.
Tips For Selling Your Home in 2019
The following tips can help you to successfully sell your home in 2019.
1. January and February Are the Busiest Months
Everyone is looking to get the new year started on the right note. Take the chance and sell early in the year.
2. Declutter and Pack
When you are getting ready to sell, it’s time to pack up all the non-essentials and get rid of anything you don’t need anymore.
Spacious, decluttered homes are more attractive and easier to sell.
3. Give Your Home an Upgrade
Upgrading anything that seems off or old is a great way to add value to your home. Even simple changes, like fixing up old faucets or replacing worn door knobs, can make a huge difference.
4. A Fresh Coat of Paint Can Do Wonders
One of the things buyers love to see are clean, newly painted walls in a home. We recommend going with neutral colors. Whites and light beiges are excellent at reflecting incoming light and making a home look more spacious.
5. Fair Pricing is Essential
Price is still king. Even if the mortgage interest rates don’t go up, buyers can become quickly uninterested in a house that seems to be overpriced. Always price your house fairly.
Do NOT try to overprice in an attempt to get some extra cash. It’ll make it harder to sell the house.
6. Share, Share, Share!
While having an expert real estate agent can make all the difference in the world, it doesn’t hurt to have friends and family share information via social media or through word-of-mouth.
7. Keep the 30-Day Rule in Mind
If your home has not sold in 30 days, the selling strategy needs to change. Is the price right? Is there anything that needs to be remodeled? Ask what can make your home more enticing and fix what you can.