Is oneÂ of yourÂ New Years resolutions to take advantage of the attractive rates to buy a home or refinance, but have a lot of questions?Â Â Even justÂ knowing the right time to take the plunge can be tricky. Pull the trigger.
Mortgage rates, of course, are not the only factor to consider when deciding whether to buy a home or refinance your existing home
. For consumers who are confident about their employment prospects and plan to live in the property for at least three to five years, the current mortgage rates make homebuying all the more attractive.
Mortgage rates have once again reached new lows, and there is money to be saved if you refinance your mortgage.Â But just because interest rates hit a new record low, doesn't mean your refinance should be a snap decision. To make your refinance a home run, you'll need to avoid key mistakes that homeowners often make.
- Understand the criteria.Â In the face of higher delinquencies, bankers have tightened lending standards for borrowers. Credit scores, income ratios and asset requirements have all changed in the last few years. Don't be surprised that what was once available in the mortgage product line, may no longer be available.
- Credit Savy Don't panic if you don't meet these requirements; there are steps you can take to improve your credit profile. Consult with a mortgage loan originator early on. You may need to reduce your debt load by paying down credit cards or student loans. Consider putting off your home purchase for a couple of months as you save up for a down payment. To boost your credit score, obtain your credit reports from each of the three main credit reporting bureaus: TransUnion, Equifax and Experian. By law, consumers are entitled to one free credit report from each of these bureaus during any 12-month period, which can be obtained through annualcreditreport.com. Examine each report thoroughly to ensure that everything is accurate. "If you are a junior and your father is a senior who's got rotten credit habits, make sure that your report is distinguished from his," says Gail Cunningham of the National Foundation for Credit Counseling. If you discover any inaccurate material, contact the appropriate credit bureau about filing a dispute. Next, take care of any unpaid obligations and, in the future, make sure to pay all of your bills on time.So before you jump on the refinancing bandwagon, do your research.
- Be prepared. One way consumers can help improve the efficiency of the mortgage application process is to have all of their paperwork in order before speaking with a lender. Gather your W2s, most recent paystubs, most recent bankstatement,know where your social security card is, and any other pertinent documents such as divorce decrees, separation agreements, and child support are examples of additional documents.
Bypassing these financing mistakes will save you a lot of money â€” not to mention headaches â€” down the line.Â
Most realtors recommend pre-approval if you want to be considered a "serious" buyer, sometimes before even taking a potential buyer to look at homes. Ask for and compare Fee Worksheets from at least 2 different lenders.
I truly hope this helps take some of the mystery out , and allows you to enjoy searching for your next new home or stay in your current home longer.