Tag: mortgage

What You Should Know About Getting Low Mortgage Refinance Rates

When you refinance you’re hoping you get the lowest mortgage refinance rates around, here are a few tips on how to get those rates.

If you’re considering refinancing your mortgage, you are likely on the edge of your seat wondering if you landed the lowest possible mortgage refinance rates. Before you start shopping for the lowest rates, there are some things that you should take care of first. You need to establish your objectives and prepare your financial situation to improve your chances of qualifying for the lowest interest rate possible.

  1. Raising your credit score

A credit score of 740 or higher puts borrowers in the best tier for a conventional loan. Most lenders require a minimum score of 620 to 640, but you’ll pay a higher mortgage rate unless your score is above that magic 740 score.

  1. Save cash for closing costs

Closing costs average about 2 percent of the home’s loan amount. You can save up and pay in cash or you can use your home equity to roll over these costs. Another option that some lenders offer is to pay a higher interest for a “lender credit” to cover these costs. This will help keep your cash to close amount lower.

  1. Lower your debt

One of the reasons that your credit score may be low is because you may have accumulated some debt over the years, and have not been yet paid it down. Lowering your debt is a good sign to lenders that you are taking financial responsibility and could positively affect your credit score.

Don’t let these three factors get in the way of the lowest mortgage refinance rates. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

The Loans That Can Affect Your Mortgage

If you feel like you’re drowning in debt, remember that not all loans are necessarily a bad thing—you can use them to prove you’re capable of making timely payments.

Different types of debt can actually boost your credit score, but overdoing it can, and will, hurt you. When you’re shopping for a mortgage, your credit score is the talk of the town. It can make or break your application and ultimately determine whether or not you’re going to get the home you’ve always dreamed out. There’s a lot of power within those three digits. The following consumer loans affect your mortgage worthiness in different ways. Here are some steps you can take to improve your credit if you have these loans, so you can qualify the best possible mortgage.

  1. Student Loans

Student loans are unsecured debt, but they won’t harm you if you pay your bills on time. Because they take decades to pay off, student loans can actually help your score. Student loans will figure into your overall debt-to-income ratio, but a large student loan you consistently pay might help you qualify for a mortgage.

  1. Auto Loans

Auto loans are secured debt, because the lender can always repossess the car if you don’t pay. In some cases, auto loans can help your credit score by raising your score since you’ve diversified the types of debt you carry. Because auto loans are easier to acquire than credit cards, mortgage lenders may look favorably on you because you’ve already qualified for a car loan.

  1. Existing Mortgage Loans

Mortgages are the classic example of secured debt because the bank actually owns your house, thus, has the ultimate collateral. When paid on time, mortgages are great for your credit score. A missed payment on previous mortgages, however, will wave a red flag to your potential lenders.

Loans don’t have to be the life-sucking entities you fear! Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

Reasons Why a Mortgage Prequalification May Not Be Enough

Mortgage prequalification is important, but you may find out—the hard way—that this may not be enough to buy a home.

Homebuyers are often told they need to prequalify for a mortgage. This is not bad advice—in fact, it’s rather good advice…up to a point. A prequalification is only a baby step toward getting a loan. What you would like to be is preapproved, which is why many homebuyers confuse the two similar-looking terms. You may be asking, “Well, what’s the difference?” Here are three reasons as to why a mortgage prequalification is not enough to purchase a home.

  1. Your loan might not be approved.

A prequalification is usually based on information about your employment and income that you provide verbally to the lender. It may, or may not, also be based on your credit score, which is what actual mortgages are approved on.

  1. You may look for the wrong home.

Without a proper preapproval, you may be setting your sights too high, or too low. Shopping for a home takes a lot of time, and that could mean a lot of wasted time and effort. Realtors won’t spend much of their time with prequalified buyers; get preapproved on the other hand, and they’ll be eating out of the palm of your hand.

  1. Sellers may not accept your offer.

Sellers are very conscious about those that bid on their homes. Place an offer with a prequalification, and the seller may insist you have a preapproval. Dean Rathbun can help make that happen.

Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

Mortgage Misconception Myths

Looking for a home? Make sure that you know the facts when it comes to acquiring a mortgage.

Getting a mortgage can be a complicated process. Because many people have found this procedure to be an absolutely hair-tearing step in the home-buying process, a plethora of myths have spawned against the mortgage application. But when you know the process, it is actually not that bad. Separate fact from fiction with these mortgage misconceptions set straight.

Myth 1: Lenders Look at Your Best Credit Score

When lenders look at your mortgage application, they DO NOT take your best credit score into consideration. Rather, they take the middle score of the three credit scores they check. They also take the lower of the middle scores if you are applying with a partner or spouse.

Myth 2: The Rate You’re Quoted is Locked

Rates are tied to the daily shifts of mortgage bonds and the economy, so a lender’s rates may change, even through the day. So unless you’re locking a rate right in the moment, your rate will likely change. You can often lock a rate when it’s quoted if you have given the lender enough information and proper documentation.

Myth 3: Fixed Rate Mortgage is Always Better Than Adjustable Rate Mortgage

Many people opt to go with a fixed rate mortgage because it can lock insurance rates no matter what happens to the economy. But these fixed rate mortgages are typically for those who will stay in their homes for a long time, and lenders often prefer borrowers take a 30-year mortgage. An adjustable rate mortgage keeps the interest low, but it’s only for a limited time. It is then subject to the forces of the market.

Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!

Stage Your Home for Selling Season

Selling your home is an art form that works well if done correctly. Staging your home is an important part of this process.

Open houses are a great way for many people to look at your home and consider buying it from you. One of the key ways they decide if your home is the home for them is to imagine themselves in it. This is where staging can make or break the potential sale. If potential buyers can’t imagine themselves in your home, they likely won’t make an offer. If you want to sell your home, here are a few tips that can help you make the sale.

Clean the Exterior

First impressions are important. If your house looks like the Addams Family’s home from the outside, you can bet clients will run from your home faster than the pace at which Cousin Itt’s hair grows! Trim the shrubs, mow the lawn, wash and paint the walls, and add a new doormat.

Use Natural Light

Natural light is something that homebuyers always look for when buying a home. Clean the windows and open the curtains to let the light flood the room. Natural light also makes any room look bigger, which will play to your advantage.

Feature the Home’s Best

Do you have a walk-in closet? Marble countertops, a breath-taking view from your dining room? Don’t be shy and flaunt the best things your home has to offer from the get-go. Anything that may hinder the appearance of such a feature, we suggest you move or remove it to better represent the quality of your home.

 Leave Your Pets Elsewhere

Your pet is a part of your family, not the buyers’. Make sure to deep clean any carpets and upholstery to get rid of that pet odor you have gotten used to. Additionally, leave your pets with a sitter when you show your home. A home that pleases the noses of your buyers puts you one step closer to selling your home.

Contact Dean Rathbun when it comes time to finding the perfect plan of action to sell your home. We are happy to help you!

The Mortgage Strategy for Millennials, Gen X-ers, and Baby Boomers

Buying a home is a big decision for everyone, no matter the age, but each generation faces its own set of unique challenges.

Millennials are just coming to their own and living independently and tend to be light on cash. Gen X-ers are in the midst of saving up for retirement as social security is all but secure. And Baby boomers are now facing less income. Each of these generational home-buying differences requires different mortgage strategies to clear the hurdle presented to them. No matter your age, here are a few tips on how you can make smart life decision when it comes to your mortgage strategy.

Millennials

Millennials have not been in the workforce that long and so many of them tend to be short on cash. If you can’t wait to live in a house AND you don’t have enough money for a 20 percent down payment, worry not because you still have options. The trade-off comes in your monthly payment. The lower your down payment, the more you will have to pay every month. Before you decide to go with a cash to close, make sure you can afford the monthly costs of owning a home.

Gen X-ers

Gen X-ers typically balance spending and saving. On average, they make more than Millennials, but they have other costs to consider like their children and their future, that is, retirement. Do they save up the entire 20 percent down payment or pay more monthly, while also funding retirement and children’s future? A mortgage financial advisor can help run different scenarios and run the numbers for you.

Baby Boomers

Retirees are living on less income, which is their primary concern. If you are a baby boomer with equity in your home but have less income, there are a few options for you.

  • Get a reverse mortgage
  • Get a home equity loan

Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!

Do Your Mortgage Lenders Really Need to Know So Much About You?

When you apply for a mortgage, it may seem like your mortgage lenders are trying to learn every single thing about you. But why?

If you have ever applied for a mortgage, you’ll know the myriad of questions that mortgage lenders will ask you. If it is your first time, you may be surprised as to the barrage of questions. Are they trying to create a clone to replace you? Sci-Fi fantasies aside, these questions are not meant to frighten you, they are meant to create a picture of your financial background to determine the probability of you paying back the mortgage in full (plus interest, of course). It is natural to feel uneasy and unsettled when handing over such important and personal documents, but it’s all part of the process of becoming approved.

What Your Banker Will (Likely) Ask For

  • Bank statements from the previous two months.
  • List of assets so that the banker knows you have enough to fall back on in the event of an emergency.
  • Last two tax returns. If you own a business, you will have to provide both the personal and your business returns.
  • 1099 forms if you are self-employed.
  • If you are a renter, canceled rent checks along with the landlord’s contact information so the lender can know if you pay reliably.
  • Credit report.
  • Pay stubs to prove salary.
  • A letter from all who gave you money to go towards your down payment or closing costs stating they do not expect you to pay them back.
  • Photo identification.

Your mortgage lender wants to know a lot about you to find you the best mortgage possible. And if they can’t, then maybe you are not ready for a mortgage just yet. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!

The Absolute Worst Credit Card Mistakes You Can Make

Your financial situation is determined by your credit score, so it is important that you avoid the worst credit card mistakes people commit every day. 

Credit cards are a safe and dependable way you can build your credit, or they can be a maniacal nightmare that leaves you wondering why you even got one in the first place and land you in bankruptcy court. The cards themselves don’t build a mountain of debt, it’s you and how you use them. Before you find yourself in the deepest crevasse of debt, know what credit mistakes you should avoid at all costs.

  1. Not using them strategically
    Debit cards avoid overspending, but they can give thieves and fraudsters direct access to your bank account. A credit card puts the bank as the middleman when there are disputes with a retailer or service provider. Use credit cards for all major purchases and transactions that carry an abnormally high risk of fraud like online shopping.
  2. Missing a payment
    Do you like magic? Here’s how to see your credit score instantaneously drop 100 points: forget a payment. Make sure to pay everything on time.
  3. Maxing them out
    Your credit depends on how much credit you have available and how much you’re using. The less credit you use, the better. Spread your charges around so you don’t use up more than 30 percent of your available credit on any card.
  4. Making only minimum payments
    The only thing worse than missing payments on your credit card is only paying the minimum balance on your dues. This can indicate to the credit card companies that you are under financial stress and may stop paying your bills altogether.

Your mortgage application depends on your credit score, make sure to not affect it. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!

What to Know Before the Pre-Approval Process

Take the steps required in order to get pre-approved so you don’t miss out on the dream house you have had your eye on for some time. 

Before you start looking for the house of your dreams you need to get pre-approved so that you don’t lose out on your perfect house. Getting pre-approved is sitting with your lender, filling out all of the tedious paperwork, and getting, well, pre-approved for a mortgage within a certain financial range. That way, you know what you can afford and only make offers on that which gives you the best opportunity for your financial dream home.

Pre-approval v. Pre-qualification

Make sure that you get pre-approved, not pre-qualified. Pre-qualification is just the process that uses unverified information to see if you even can qualify for a mortgage. The pre-approval process uses verified documents to obtain a mortgage amount. It also lets sellers know that you are serious about buying.

Benefits of Getting Pre-Approved

  • Sellers will take your offer more seriously: Whether you get that home you’ve had your eye on depends ultimately on the sellers. If they see you have been pre-approved they know you are serious about your offer and will be more inclined to accept it.
  • You know exactly what you can and can’t afford: Instead of wasting your time looking at houses that are potentially above your price range, you know exactly what to look for. A word to the wise: Don’t submit your pre-approval letter with your offer. If the sellers know you can afford much more than you’re offering they may use that against you.
  • Eliminate pre-closing surprises: Because you already dealt with all the paperwork most people dread at closing time, you are much less likely to be surprised by anything during the closing process.

The pre-approval process does not have to be confusing. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!

Make the Most Out of Refinancing

Some homeowners jump too quickly at the opportunity to lower their mortgage payments, but is there a way to make the most out of refinancing.?

The monthly mortgage payment is the most expensive thing that many homeowners make. Refinancing allows homeowners to reduce their payments, and while it can be done responsibly if planned accordingly, some homeowners jump blindly. Wanting to save money is usually the main reason most people want to refinance, but some experts believe this process is not only outdated, it is far too simplistic. A more realistic complex model shows that waiting for bigger savings will save you much more money in the long run. Here are a few tips on how you can save the most money on your mortgage.

Turn down free money. By now you should know that nothing is truly free. You need to evaluate a few things first. You have to compare the reduction in monthly payments against the costs associated with refinancing. Only when the difference is substantial should you refinance.

Weigh the pros and cons. You need tread carefully on when to pull the refinancing trigger. Consider the mortgage application fees, title insurance premiums, and other closing costs. For example, if you have the ability to save $25 now, you lose the opportunity of saving $50 or even $100 if interest rates continue to fall. The optimal time to refinance is when the rates have fallen 1 to two percent from your existing mortgage.

Look before you jump. This analysis serves as a conduit to remind you that many financial decisions are more complicated than they seem. Saving is important, but pouncing to soon can lead to ultimate losses.

Make sure that your refinancing gives you the best savings.  Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!