Owning your own home is still one of the smartest ways to build wealth and secure a bright financial future for you and your family. And with interest rates still at historic lows, you can find some fantastic deals. Today, you can put down roots anywhere you like. Remote working has changed the landscape of home buying, making owning a home anywhere in the country a reality. Your Realtor® will tell you that location is one of the most important aspects to consider when buying a home, but your down payment and interest rate also play a critical role in determining when, where and how much you can afford. You may even be able to afford houses you initially thought were out of your price range. That’s why it’s essential to seek the advice of an experienced mortgage lender when embarking on any home buying journey. To determine which mortgage loan is right for you, your lender will need to consider the following:
- The Down Payment:
Have you saved enough of a down payment? This is one of the first things to consider when house planning. It’s wise to make sure your monthly payments are as manageable as possible. While you may be under the impression that 20% down is standard, that is no longer the case. It all depends on the type of loan you choose, whether it’s an FHA, VA, or a less conventional loan, and some may even require as little as 5% down.
- The Credit Score
Working on your credit health is vital to ensure you obtain the best, lowest possible interest rate. Usually, the higher your credit score, the lower you can expect your rate to be. While this formula rings true for most, there are many new products out there, such as Non-QM loans, that can help you get a great interest rate even if you have less than stellar credit or are self-employed with harder to verify income.
- Your Debt to Income Ratio
Your debt to income ratio, or (DTI), indicates your financial health and your ability to repay the loan. Lenders prefer to see a DTI of less than 36%, with no more than 28% of that going towards your monthly mortgage payment. Every financial situation is different, and your lender will help you determine the best products to address your unique financial needs.
- Proof of Employment and Tax Returns
Gathering your paperwork is often the most stressful part of the loan process. Your lender will advise you of what’s needed to secure a loan. To avoid delays, submit the paperwork as soon as it is requested. You’ll need to show you can repay the loan by proving you’ve worked steadily for at least a year or two usually in the form of pay stubs. Your lender will also need your last two years of tax returns. Remember, each step brings you closer to the loan that is right for you!
Choose a Trusted Lender
The loan process does not need to be stressful. It can be hassle-free and seamless with an experienced, seasoned team at your side every step of the way. The professional loan specialists at NP, Inc. are committed to helping you find the best home finance products at the most competitive rates. We are dedicated to complete client satisfaction putting the client first in every transaction. We go above and beyond, and that’s what distinguishes us from other mortgage companies. We’re not just about closing loans; we hope to build a relationship with you that lasts for years to come. That’s why so many of our client’s children are now our clients too! Throughout our 25 years in the mortgage lending industry, the NP. Inc. team has helped thousands of borrowers like you make the dream of homeownership a reality! If you are interested in learning more about NP, Inc.’s lending services and loan products, we invite you to visit http://usmtg.com. You can fill out a mortgage application directly on our site.
By Susan Sherman, for NP, Inc.