How To Shop Around For A Mortgage, Part One

Stone Bridge Mortgage_Mortgage Broker vs Bank Lender

 

Most home buyers, even beginners, know that you don’t settle on the first home you find. You’re meant to shop around. Something else Gresham home buyers may not know, however, is that it’s wise to shop around for a mortgage, too. Finding the right mortgage loan is incredibly important. Choosing your mortgage has a big impact on your finances for the foreseeable future.

Gresham home buyers should consider all of their mortgage options before settling on just one. Here’s a quick guide to understanding mortgages as you start shopping around:

The Stages of a Mortgage Application

  1. Pre-qualification: Before shopping for a house, Gresham home buyers should get a mortgage pre-qualification letter. In today’s competitive housing market, a pre-qualification letter lets your Realtor and other potential sellers know that you are serious about looking for a home. It acts as an assurance that you have the ability to by the home you are interested in. Remember that having a pre-qualification letter does not mean you’re approved for a mortgage. These letters informal and optional, but they just might ease sellers’ fears that financing will fall through if they accept your offer.
  2. Pre-approval: Gresham home buyers can get mortgage pre-approval after putting an offer on a home. Getting a pre-approval involves submitting a mortgage application to the bank. The bank will run your credit and research the home you want to buy. If you meet qualifications, they’ll give you pre-approval. This means that if all the conditions are met, the bank agrees to finance the home.
  3. Closing: This is where the mortgage is finalized and you become a homeowner.

Loan Types

The four most common types of institutional mortgage loans include conventional, FHA, VA, and jumbo mortgages. Gresham locals looking to buy a home should first research which types of loans they qualify for and which would be best suits your needs. Each type of loan has benefits and drawbacks.

  1. VA loans are guaranteed by the Department of Veterans Affairs. VA mortgages require as little as no down payment, but they are only available to qualified veterans.
  2. FHA loans are backed by the Federal Housing Administration and require as little as 3.5% down if you qualify. For Gresham home buyers who have trouble putting back savings, this can be a good option. The drawback, however, to putting less than 20% down payment is that you will be required to pay private mortgage insurance (PMI), a monthly payment used for security in case of default.
  3. Conventional mortgages require at least 20% down and don’t require PMI. Generally, a conventional loan the best choice for Gresham home buyers who have enough money in savings to cover the down payment and associated closing costs.
  4. Lastly, jumbo mortgages must be used if you are financing more than conventional conforming loan limits. Due to their amount, these loans have special restrictions and credit requirements.

Repayment Terms

Your repayment term is the term over which you pay back your mortgage. The two choices Gresham home buyers have for repayment terms include a fixed interest rate mortgage, where the interest rate remains the same over the life of the loan, or an adjustable interest rate, where the interest rate can decrease or increase at specific intervals such as annually.

  1. Fixed-rate mortgages tend to be a safer option, especially for Gresham families who plan on staying in a home for more than a few years. There are many different mortgage terms to choose from, such as mortgage terms of 15, 20, or 30 years. 30 years is the most common mortgage rate terms and keeps your monthly payments low. However, while monthly payments on a 15-year mortgage are higher, you ultimately save money because there is less interested accrued over 15 years than over 30.
  2. Adjustable-rate mortgages can save you a lot of money if you play on living in the residence a short time. Your interest rate is much lower than a fixed-rate mortgage for the first five or seven years, but will then adjusts to the average interest rate every year thereafter, which could be much higher. If you still own the home, your mortgage payment could go up dramatically, so it is riskier.

Stonebridge Mortgage Group Offers Guidance on All Mortgage Matters

Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

How To Prep Your Credit To Buy A Home

Stone Bridge Mortgage Group_Loans to Help Gresham Borrowers Build Credit

 

Gresham Locals Looking To Buy Homes Need To Build Credit

One of the most important things to have in order as you prepare to buy a home is your credit score. Gresham home buyers should know that their credit score plays a huge role in being able to secure a mortgage. Conventional mortgage lenders will typically want a FICO score of at least 720, or in some cases 740, but those with a score above 580 may still qualify for an FHA loan.

In order to build your credit up to where you need it, try the following:

Review Your Credit Report

The first step Gresham home buyers should take, several months before they plan to get a mortgage, is to check their credit report for any issues. Checking two to three months in advance should suffice if you generally pay your bills on time. This leaves you time to correct any possible errors. However, if you have late payments or other derogatory items on your account, check six to nine months in advance.

Dispute Any Inaccuracies

Check closely for any inaccuracies on your credit report. For example, there may be an item you’ve paid for that is marked as unpaid, or an account showing up that isn’t your own. If this happens, file a dispute with the credit reporting agency.

Have Several Tradelines

Gresham home buyers will find that conventional loans require at least three tradelines (any combination of credit cards, student loans, car loans, and so on) that have been active within the past 12-24 months. FHA loans only require two tradelines. While it’s fine to have more, if you have fewer you won’t be able to qualify for a mortgage. If you need to open additional tradelines, try getting a major credit card like a Visa or a Mastercard at least six months before you apply for a mortgage and using it for items you would buy anyway. Never charge more than 30% of your allowed limit and be sure to pay it off in full when you get your bill.

Leave Older Credit Lines Open

Older tradelines actually help boost Gresham home buyer’s credit scores. Even if you don’t use them often, keep them open. Use those credit cards every few months and pay off the balance in full so those tradelines remain active.

Avoid Opening New Credit Lines

Don’t open any new credit lines within up to six months before applying for a mortgage, as this can temporarily lower your credit score. Because the credit bureau doesn’t know how you’ll handle the new credit, it is a risk factor.

Stop Buying On Credit

Gresham home buyers may be tempted to rush out and charge new appliances or furniture for a new house before closing. This is a bad idea. Having a debt utilization ratio above 30 percent right before closing could disqualify your loan. Unless you can pay cash, wait to purchase the new furniture until after the loan is closed.

Don’t Shuffle Money Around

When Gresham home buyers apply for a mortgage, you’ll find that you’ll need to provide several months of bank statements for your checking and savings accounts. Suddenly having large transfers between your accounts will show on those statements. Leave your money and accounts the same for at least 3 months.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We can help get you pre-approved for a mortgage and assist with real estate loans and other mortgage solutions—both Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with your home buying needs!

 

Call us today at 503.661.5580

 

Home Appraisals and Inspections

 

Stone_Bridge_Mortgage_Home Appraisals and Inspections

If you’ve begun looking for your first home, you’ve likely heard of a getting a home appraisal and home inspection. What exactly are home appraisals and home inspections, though? Is there a difference between the two? Are they really necessary?

Home Appraisals

A home appraisal determines the value of a house based on certain factors, including “comparables.” An appraiser will take a few things into consideration when deciding the market value of a home. For example, they often look at comparable homes in the area which have recently sold and certain amenities in the house. It is important to remember that an appraisal doesn’t decide the “worth” of the home, but the market value.

The appraisal helps determine how much money your lender will give you to buy the house. Having the home appraised is therefore necessary when seeking out a loan. If you’re selling a home, it’s more beneficial to you if the appraisal is high. When you’re buying, however, a low appraisal is better. Appraisals can differ from one appraiser to the next, but they’re usually closely based on the assessment of the above-mentioned factors.

Home Inspections

Home inspections involve an inspection of the house itself, focusing on things like structural issues. Generally, home inspections include a look at the roof, the heating and cooling system, plumbing systems, and electrical systems. While home inspections are not exhaustive and therefore may not uncover every possible issue, home inspections are still a very important step in the home buying process.

Some mortgage programs may require specific inspections. However, generally speaking, home inspections are not a hard requirement for every mortgage option. Still, it is best to choose to have a home inspection done anyway. Buying a home without inspections could potentially leave you open for some major issues. It’s better to spend the money on an inspection that could save you more costly expenses down the road.

Count on Stonebridge Mortgage Group for all your mortgage needs.

In addition to appraisals and inspections, there are a lot of ins and outs to familiarize yourself with over the course of the home buying process. For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We also help get you pre-approved for a mortgage and help with your real estate loans and other Stonebridge Mortgage Group serves the greater Portland area and are in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

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