Josh's Mortgage Report

As the cold air moves in there are many projects and repairs that can be done to prepare your home for winter. Taking care of small problems now could save you a lot of money down the road in repair costs for things like water damage.

Speaking of water damage, as the leaves fall it is important to keep your gutters free of debris so water can flow to the correct place. When gutters are clogged water will spill over the sides and can cause flooding which can end up seeping into your house. When the water starts to freeze even more damage can ensue. Also, it is important to remember to shut off the water on your hoses when the time comes to prevent the pipes from bursting.

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Even though it’s a major financial move, owning a home has many advantages. Along with pride of ownership, more privacy and control over your own home there are also great financial benefits to owning.

Building Equity: Unlike renting when you own a home you’re paying down the mortgage each month instead of a landlord. As you pay your mortgage each month your equity grows. When it comes time to sell your home, depending on how long you plan to live in the property, you may have enough equity to sell for a profit.

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The purchase of a home is one of the largest investments you can make which is why it is so important to shop around in order to find the best deal. While mortgage shopping does lead to credit inquiries, the effect on your credit score is very minimal and if you shop smart you are likely to only see your score drop a few points.

While you are shopping for a mortgage you may have your credit pulled several times by different lenders as you compare rates and fees. You won’t have to worry about your credit score taking a big hit from this as credit bureaus allow home buyers a two week period where you can compare rates with multiple lenders and your credit report will only be charged with one inquiry. Also keep in mind that new credit makes up only 10% of your FICO score, so having a lender pull your credit report is estimated to lower your score by only five points.

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During the home buying process you will be working with several different business professionals including myself and your realtor. Because this can be an overwhelming time, I want to familiarize you with some of the other professionals that will come into play to make your homeownership dream a reality.

First off I will let you know who is on my team. While you may not come in contact with all of these people each one plays an important role. Once I have your loan application and proper documentation the Loan Processor will then prepare your loan information to present to the Mortgage Underwriter. The underwriters are the ones who will determine if your loan can be approved.

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The mortgage industry is continually evolving and it is important to be especially mindful of your finances when you are going through the home buying process. Before you start the purchase process you should be aware of some of the top things that could possibly keep you from getting a loan approved.

One of the most important things lenders have to review in order to qualify a borrower is the debt-to-income ratio (DTI). Your DTI determines the amount of debt divided by gross monthly income. Typically this figure needs to be at or below 45 percent to qualify so if you are above this number you will need to work on paying down debts to qualify.

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While it can be more difficult to obtain a mortgage if you are self-employed it is not impossible. The most important part of the process will be verifying your income as you will not have the paystubs like you would from a typical job. Therefore several tax documents and other forms will be required to prove your eligibility.

If you are self-employed and are applying for a mortgage you will be requested to provide a great deal of documents which can sometimes seem a little extreme, but rules and regulations must be followed. If you prepare ahead of time by gathering your documentation this will make the process much faster.

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If you have previously gone through the process of buying a home, you may have already experienced having your loan sold to another company. If not, don’t worry if/when this happens to you as this is a very common practice in the industry. Most all loans in today’s market will be sold at least once throughout the life of the loan.

There are two parts of the loan that can be sold – the mortgage note and the servicing rights. This means that in some cases the owner of your mortgage note is not the same company you’re paying each month. Whenever there is a transfer taking place, whether it is your mortgage note or the servicing, you will be notified at least 15 days ahead of time.

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While there is a lot of negativity regarding the amount of student loan debt piling up in the U.S. the news isn’t all bad. Student loans are a valuable asset and have the potential to produce great rewards such as higher income and higher homeownership rates.

While student loan debt will affect your debt-to-income (DTI) ratio, staying on top of your payments each month will help to boost your credit score. Your DTI is a key factor in qualifying for a mortgage. If you have over 50k or pay more than 10% of your monthly income in student debt then your chances of owning a home could be at risk.

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As the housing industry gets increasingly competitive more young couples are choosing to purchase a home before tying the knot. According to the National Association of Realtors, 25% of buyers are single. Traditionally the purchase of a home would come after marriage; however, millennials are realizing that it could be a smart financial move if the opportunity arises. Delaying marriage has allowed couples to buy larger homes as they have more money saved up for a down payment.

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As you know, homeowners insurance is required in order to obtain a mortgage loan. There are a number of factors that can affect the cost of homeowners insurance. For instance, did you know that people with average credit are paying 29% more for homeowners insurance than those with excellent credit?

Maintaining your credit is one of the smartest things you can do as it affects so many important aspects of your life. While not all insurers use credit scores to determine insurance premiums there is a definite correlation between credit history and insurance risk.

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