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Four Tips To Improve Your Mortgage Options in 2014 -
February 28, 2014

1. Document, Document, Document

The new mortgage regulations went into effect in January, with that being said lenders will be extra meticulous when underwriting loans in 2014.  Lenders will be following these guidelines precisely and verifying borrowers have the ability to repay their loans.

Make sure you keep good records of your finances- this is key for obtaining a mortgage loan.  You will need 2 months of bank statements, 2 years of tax returns (W2’s, investment accounts, and any other assets you own).  Be prepared to explain any unusual deposits on your account.  That $500 that you deposited in your account from the wedding gift could delay the closing process if you are not able to explain where the money came from.

2. Know the Score

It is almost impossible to get a loan without decent credit.  Know what your credit score is.  During the process make sure you monitor your credit history and credit score until the loan closes.  

Some of the ways to improve your credit score are as follows:

  • To establish credit contact local bank services and inquire about a secure credit card
  • Keeping revolving credit card balances at 25% or less of the credit limit
  • Don’t close credit cards during the mortgage process
  • Don’t apply for new credit of any kind
  • Continue to use your card as you normally would

You can get one free copy of your credit report from each credit bureau (Equifax, Experian, and TransUnion) every 12 months at www.annualcreditreport.com.    

The best mortgage rates usually go to borrowers with credit scores of 720 or higher.  You may still get a mortgage with a lower score, but lower scores will mean higher rates or higher costs.

1. Document, Document, Document

The new mortgage regulations went into effect in January, with that being said lenders will be extra meticulous when underwriting loans in 2014.  Lenders will be following these guidelines precisely and verifying borrowers have the ability to repay their loans.

Make sure you keep good records of your finances- this is key for obtaining a mortgage loan.  You will need 2 months of bank statements, 2 years of tax returns (W2’s, investment accounts, and any other assets you own.)  Be prepared to explain any unusual deposits on your account.  That $500 that you deposited in your account from the wedding gift could delay the closing process if you are not able to explain where the money came from.

2. Know the Score

It is almost impossible to get a loan without decent credit.  Know what your credit score is.  During the process make sure you monitor your credit history and credit score until the loan closes.  

Some of the ways to improve your credit score are as follows:

  • To establish credit contact local bank services and inquire about a secure credit card
  • Keeping revolving credit card balances at 25% or less of the credit limit
  • Don’t close credit cards during the mortgage process
  • Don’t apply for new credit of any kind
  • Continue to use your card as you normally would

You can get one free copy of your credit report from each credit bureau (Equifax, Experian, and TransUnion) every 12 months at www.annualcreditreport.com.    

The best mortgage rates usually go to borrowers with credit scores of 720 or higher.  You may still get a mortgage with a lower score, but lower scores will mean higher rates or higher costs.

3. Keep Expenses Reasonable

Try to keep your monthly debt obligations below 43 percent of your income.  Lenders will want to see that you have reserves after you pay your bills to live on.  Approximately 2 months of mortgage payments is usually sufficient.

4. Get Prequalified

 Call us to find out about your mortgage options! Call us today!

Posted by Pam Woodall



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