Homes in California are expensive, and not everyone can get a mortgage in Lafayette. But there are a few key strategies you can employ to make your home loan application as competitive as possible. Follow these tips and you could be on your way to owning a California dream home.
Beef up your savings naturally
Banks are going to look at your savings accounts when considering your application, so you’re going to want to have as much money in there as possible. Unfortunately, if you have a couple thousand dollars mysteriously deposited before you apply, it’s going to look fishy. They’ll know if a friend or relative loaned you the money beforehand just so you could look like you are more financially stable than you are. So what do you do? Well, you don’t decide to buy a house on a whim. Owning a house is a big responsibility, so you should be prepared to take the necessary steps to ensure you have a solid application for a mortgage in Lafayette. Step one is to save your money however which way you can for as long as possible. Eat at home, utilize your library for entertainment fixes, keep your thermostat locked in at 68 degrees, etc. The reason banks want you to have a solid savings account is that most people live paycheck to paycheck. You know this, and it’s no secret to banks, either. So if you are one catastrophe away from a financial tailspin, they’re going to be less likely to loan you any money. Put whatever you can into savings, and if you plan on getting any big tax returns, don’t blow it all away on a new TV. Put it into your financial war chest to help you qualify for a mortgage in Lafayette.
Pay off debts to get a mortgage in Lafayette
It doesn’t look good if all of your credit cards are maxed out, if you have a bunch of student loans you’re still working on, or if you’re behind on utility bills. Pay off what you can as soon as you can. Interest rates are low right now, and even if they go up a point or so, they’re still going to be incredibly low compared to the 70s and 80s. Don’t rush taking out a mortgage in Lafayette! Take the time to pay everything off. If you have more than a few debts you’ve accumulated, it’s best to pay them off from smallest to largest because the fewer line items you have the fewer you’ll be asked about. Plus, once you see that is possible to pay something off, you’ll be more inclined to keep working on paying everything else off, too. Living debt free is truly a blessing.
A note on cable and smartphones: Many people in the US are habitually behind on cable, internet, and cell phone payments. Take a hard look and ask yourself if those things are needs or wants. It’s hard to operate in this world today without internet and cell phones, but you don’t need the fastest internet that money can buy, nor do you need unlimited data. Furthermore, there are a lot of cheaper alternatives to cable out there right now. If you are constantly behind a month’s payment on any of these, you need to downgrade. Do so to save your credit, and do so to save up more money to either put in savings or throw at other debts. This will make you a much stronger candidate for a Lafayette mortgage.
Stay at your stable job for now
If you’ve been considering transferring jobs amidst applying for a loan, reconsider your timeline. Banks like to see stability, particularly when it comes to staying in the same industry. Even if you would make more money at the other job, it could slow things down in the employment verification process. It’s OK to get a new job as soon as you’ve gotten the keys to your new house, but don’t do it while the bank is still reviewing your application or shortly beforehand unless you’re ok with waiting longer to get approved for your mortgage in Lafayette.
All of this harkens back to how you shouldn’t decide to buy a house in the spur of the moment. All of your will and all of your purpose needs to be locked on what it is that you want. If getting the new job is more important to you, know that your application processing may slow down. No, you may not be declined, but you’re definitely not going to be a shoo in just because you’re making more than before.
To sum it all up, if you really want to move, and you’ve found a house you really love, consider staying in your industry for now to get approved for a mortgage Lafayette loan.
Continue to pay bills on time
Just as you should pay off all of your loans, you should also pay your bills on time to help get a mortgage in Lafayette. If you miss a credit card payment, that missed payment will become a negative item on your credit history and will likewise lower your credit score. It’s thus bad for you in two ways. Banks will 1) see that you have a tendency to miss payments, and won’t consider it farfetched that you might miss a payment on your Lafayette mortgage, and will 2) count that low credit score against you. A low credit score raises the interest amount you pay each month, and lowers the loan amount for which you’ll get approved. So be sure to pay those bills on time!
That annoying reminder your bank pops up on your screen every time you log-in offering automatic bill payments suddenly doesn’t seem so bad now, does it?
Organize your financial information before you apply for a mortgage in Lafayette
A loan officer may have pre-qualified you for a loan based off of verbal answers you provided over the telephone, but that doesn’t mean you’re in the clear just yet to be approved for a mortgage in Lafayette. You still need to get pre-approved through a loan underwriter. You want to make this guy’s job as easy as you can because he’s the one that counts. You’re going to need two years of tax returns, a couple months of bank statements, employment verification, and your social security number (so they can check your credit score). Drag your feet on these and it doesn’t look good.
Make sure you have everything ready before you even make the phone call for the pre-qualification (again, because you shouldn’t buy your first house on a whim). Your mortgage officer in Lafayette will take care of the employment verification and might also take care of your bank statements if you upload your account information. Tax returns, though, are usually what give most people hiccups. They’re either on a father-in-law’s computer, or they’re buried amongst a bunch of credit card statements and doctor bills. Find them and scan them. Make an underwriter’s job easy, and it will be easier for him or her to determine if you are a credit worthy individual.
Check your credit report for accuracy
When you request your own credit report, it will not affect your credit score. You can look at your score and report as many times as you want without consequence. Most people know that multiple inquiries into either a credit score or credit report will lower their score, and they assume that they can damage it themselves by looking. This is not the case, so look! You need to know what your score is, and you also need to know what information is on your report. As a credit score is nothing more than a number, a credit report is nothing more than your financial history. It lists your debts and any missed payments. Pay close attention to your debts, and do this for a couple of reasons. 1) A missed or late payment may be listed that you know for a fact is not true (bank statements are wonderful for this these days). And 2) there may be a debt listed that you didn’t make, i.e. identity fraud. Don’t think identity fraud is something that just happens to other people. The odds of it happening to you are higher than you think, so look and verify that everything on your credit report is factually accurate.
Buying a house is a long financial commitment, and for a first time buyer it may be overwhelming. Take it one step at a time. Determine when you want to get a mortgage in Lafayette, and begin the process as soon as you can. Pay off your debts, pay your bills on time, and give yourself a good solid month to get all of your financial information together. You want to make it as stress free as you can because buying a house should be fun. You shouldn’t be worried about anything, you should be excited. When you get to your new house you’ll know it was all worth it.