What does it take to get a mortgage today? – Half Moon Bay Review : Community

What does it take to get a mortgage today? – Half Moon Bay Review : Community.

Your debt to income ratio cannot exceed 45 percent. The higher your credit score, the lower the mortgage rate. A score of 740 or above will give the best rate; a 690 will work, but you will pay between one-eighth to one-quarter of a percentage point more. Rates have certainly moved up this year after the announcement from the Federal Reserve saying it planned to gradually stop buying bonds sometime in the near future. The rate changes daily, but now it’s hovering around 4.375 percent for 30-year fixed mortgages.
The amount of the down payment will also affect both the rate and monthly payment. A 20 percent down payment is the magic number, but other programs are available. The banks are once again offering second mortgages with purchases reducing cash needed. Wells Fargo is doing 80 percent first mortgages with a 5 to 10 percent second mortgage and a 10 to 15 percent down payment. This avoids the costly Private Mortgage Insurance premium, which can add a few hundred dollars a month to your payment and isn’t tax-deductible.
For those with less cash, there are the FHA loans that only require a 3.5 percent down payment and 3.5 percent for closing costs. Here you will have to pay PMI — at the time of closing and every month thereafter until you have 20 percent equity in the property.

So what does it take to get a loan today? According to Griffis, banks are going to want to see two years of tax returns, pay stubs, bank statements and a letter explaining any gaps in employment. If part of your down payment is a gift, you will have to season it in your account for two to three months or obtain a letter.

What does it take to get a mortgage today? - Half Moon Bay Review : Community


Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*

Louisville, KY 40222*


2 thoughts on “What does it take to get a mortgage today? – Half Moon Bay Review : Community

  1. Here are six tips for improving your credit score for a fresh financial start in 2017.

    1. Pay Your Monthly Bills on Time
    Paying monthly bills is a necessary chore that has a definite effect on your credit score. According to the FICO scoring model, your payments account for as much as 35 percent of your total score. Create reminders for due dates or establish a calendar for yourself to ensure you get everything paid on time.

    2. Reduce Your Debts
    Got credit card debt? Start paying it off now. Part of your credit score is based on the amount of available credit you have, known as your credit utilization ratio. So if you’re carrying high balances, you’ll want to lower them as soon as possible. Create a personal budget with a goal of reducing your spending so that it’s lower than your income. Then, use any monthly surplus for your credit card debts until they’re gone for good.

    3. Limit Credit Inquiries
    Looking for a new apartment? What about a mortgage? In either situation, try and group your applications together as much as possible. Applications for new lines of credit will generate a “hard pull” on your credit, and having too many of them in a short period of time can lower your score. However, credit reporting agencies usually consider a group of applications within a short period of time as one pull, as long as they’re in the same category.

    Similarly, limit yourself to opening up no more than one or two credit cards per year, which also generate hard pulls. Even if you get a ton of offers in the mail for stellar sign-up bonuses, they’re likely to be offset by the damage to your credit. FICO reports that new credit and credit inquiries account for 10 percent of your total score.

    4. Don’t Cancel Old Cards
    Have a card you don’t use anymore? Don’t close it. This can negatively affect your score as it lowers your amount of available credit. Instead, use it about once per month and don’t forget to pay the bills in full, and on time.

    5. Request Credit Limit Increase
    If you only have one card and you’re constantly approaching your spending limit, call the bank and ask for an increase in your credit line. This will raise the amount of available credit, which will eventually improve your score.

    6. Take Care of Late Payments Before They Hit Your Score
    If you do happen to miss a payment, contact the card issuer immediately. If you have good history built up, the company may agree to not report your late payment. Even if you can’t avoid a late-payment fee, be sure to get your account up to date as soon as possible so you can limit the damage.
    Your credit score is yours to own. It reflects your financial history and helps lenders predict how you will manage your finances in the future. Due to the lingering effects of credit, you don’t want to waste any time to improve your credit.

    Joel Lobb
    Senior Loan Officer

    American Mortgage Solutions, Inc.
    10602 Timberwood Circle, Suite 3
    Louisville, KY 40223

    phone: (502) 905-3708
    Fax: (502) 327-9119


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