Preparing Financially for the Mortgage Process

Purchasing a home is exciting and adventurous. Home buyers, particularly first-time home buyers, typically don’t know a lot about the process of financing a home. To avoid making mistakes, you need to know what you should expect. It is important to consider the state of your credit, the additional costs besides just the down payment, and the important questions dealing with the future.

 

The Credit Aspect

Your credit score is one of the first things a lender will look at when you apply for a mortgage. To cut through all that confusion, here are five tips you can act on right now:

  • Check your credit reports for free once a year through the three credit bureaus: Equifax, Experian, and TransUnion. Why all three? Because the information in each of the three bureaus’ reports can differ. If one or all of the reports include mistakes, your credit score may be negatively affected, and you may need to address the errors before going house shopping.
  • Be strategic with credit card use. The percentage of your credit limit that you use every month can affect your score. Make sure your balance doesn’t come too close to your limit.
  • The simplest and most important tip? Pay off your balance each month. To maintain a healthy score, pay off the balance before the due date. Anything after 30 days past the due date can spell very bad news for your score.
  • Be consistent. Good credit behavior over the long term will keep your score high.
  • Don’t take on more credit. If you apply for several different credit cards, you’re sending a message that you may have maxed out your other accounts

 

Save enough for the down payment and other additional fees

You should plan to make a down payment of 3.5% – 5% at the very least when you are determining affordability. It is important to consider that down payments are not the only costs associated with the purchase of a home. Your lender should be able to provide you with a breakdown of your costs that you will be paying upfront and on a monthly basis. Here are some basic tips to help you save for the costs associated with buying a home:

  • Start a budget: Making a budget allows you to see your expenses, how much money is coming in, and what is left over to save or pay off debts. When you have a savings goal it, helps prioritize your money by eliminating or cutting down on unnecessary expenses.
  • Automate: Once you have created a budget and figured out how much you can comfortably save each month or paycheck, set up a specific amount or percentage of your paycheck to go to savings automatically. For some, it helps to open up an entirely separate savings account for their home’s down payment and expenses. This method allows you to see how much you are saving specifically for the home buying process and keeps you from accidentally spending this money on something other than your new home.
  • Increase your income: If you are worried about cutting back expenses, or just want to save for your down payment faster, consider finding ways to increase your income. Some ideas include working overtime, getting a second job, or finding alternative ways to making money such as selling items online.
  • Save any unexpected money: When you get a large sum of money, such as a bonus or your tax refund, itis all too easy to take on the extra cash and purchase that one expensive thing you’ve had your eye on for months. Instead of going on a shopping spree, take that money and put it into your savings right away to help you achieve your dream of homeownership sooner.

 

Affordability now and in the future

Regardless of the level of income you have today, you need to figure out what the future may hold before you sign on the dotted line. For example, if you’re planning to have kids sometime down the road, how will these happy additions impact your family income? What effect will job changes have on your current income level? And have you planned for monthly payments into your rainy day savings account?

Everyone who looks to buy a home will have a payment amount that is affordable today, but in the face of your answers to the questions above, will that number still work for you down the road? These are some questions to consider as you think about homeownership.

 

Feel free to talk with a loan officer in your area to determine if homeownership is the right path for you!

Tips for First Time Homebuyers

Tips for New Homebuyers

Tips for First Time Homebuyers

1. Save Money – If you are a first time home buyer, there are a number of reasons to stash some cash. While there are loan programs available that do not require a down payment (like USDA Rural Development and VA mortgage loans), most first time home buyers don’t consider other costs associated with becoming a home owner. Closing costs, homeowners insurance, and home inspection fees may still be applicable. Start saving now, for less stress later.

2. Check Your Credit – No one likes surprises on their credit reports. New home buyers are even less thrilled to discover they have problems on their credit reports that they were unaware of. Checking your credit early allows you to come up with a game plan. Lenders have minimum credit score requirements for every loan program that a licensed mortgage loan officer can explain in detail – and often help you achieve given the right time. Use our branch locator to connect with an Inlanta Mortgage loan officer to discuss your credit situation. Inlanta loan officers frequently review credit reports and provide advice on how to improve credit scores for home financing purposes.

3. Organize Your Documents –  Financing a home requires quite a bit of documentation. Gather your tax documents, investment and banking statements, student loan pay-off information, pay stubs, etc. Your loan officer will let you know what exactly what documentation is required for the home financing you need – but it never hurts to have your documents in proper order before beginning the process.

Apply for a Mortgage Loan

Applying for a mortgage is the first step in the process. Click here to apply now or use our branch locator to find a specific branch or loan officer. After receiving your application, your loan officer will reach out to you to verify financial details in order to provide a loan pre-approval. You do not need to have a specific home in mind to apply for a mortgage loan. In fact, having a pre-approval when house hunting is better for all involved. Read more about the value of pre-approvals.

About Inlanta Mortgage

Headquartered in Brookfield, Wis., Inlanta Mortgage was established in 1993. The company has grown to 31 branches in 16 states and over 220 employees. Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs.

Inlanta Mortgage was named a Top Mortgage Lender in 2012 by Scotsman Guide and has been listed on Mortgage Technology’s Top 25 Tech Savvy Lenders List for the last four years. Inlanta has also been named to the Milwaukee Business Journal’s “Top 25 Largest Milwaukee-Area Mortgage Banking Companies” and Mortgage Executive Magazine’s “Top 100 Mortgage Companies in America” in 2011 and 2012. In addition, Inlanta was named a “Fastest Growing Firm” by Milwaukee Business Journal in 2013 and a “Platinum Million Dollar Lender” by the USDA Rural Development Program.

Inlanta Mortgage’s Mission

Inlanta’s mission is to be the home financing partner that you trust to serve your family, friends and community. Through our family of dedicated mortgage professionals our commitment is to deliver an exceptional experience. Our unwavering dedication to integrity, honesty and ethics is the foundation of all of our relationships.

For more information, please call Inlanta Mortgage at 262-439-4260, email info@inlanta.com or visit the company’s website at www.inlanta.com. For more information on branch partnership opportunities with Inlanta Mortgage visit inlantapartners.com or email partners@inlanta.com.