Given uncertain economic conditions, many people believe that buying a home is no longer with in their reach. But they could be wrong. With long term home mortgage rates falling as low as 3.31% in 2012, this is actually a good time to buy a home. A reliable firm of direct mortgage lenders can not help you find low interest home loans, they can also help you with other financial services such as refinancing a loan or consolidating debt.
Home buying 101: A good credit score
In general, according to the Home Loan Learning Center, the majority of commercial mortgage lenders will not approve jumbo loans for people with a credit score of less than 680. For FHA mortgage loans, a minimum credit score of 620 is needed. Buyers should also expect to have to make a down payment of around 3.5% of the value of the home, though this might vary a little for different direct mortgage lenders.
Sometimes, buyers can make up for a low credit score by making a larger down payment. In general, though, it is a good idea to maintain a good credit score. This involves cleaning up credit history and making sure that any errors are corrected by credit reporting agencies.
Making the mortgage process easier
In the world of home buying, low rate mortgages are the Holy Grail. When looking for home loans, finding good mortgage rates is key. Experts advise that buyers should lock in a rate as soon as they are find the numbers they are comfortable with. Financial experts also advise that total household monthly debt payments, including mortgage payments, should be around one-third and no more than 36% of gross monthly income.
Getting a good mortgage rate is only the first step. Buyers should keep in mind that there will be costs like closing costs; they may also be called upon to pay for points. It’s a good idea to hold off on any other major expenses when buying a home. Experts also caution that any changes in employment status or income can delay or even half the mortgage process. So it’s best to stick with your employer until the contract is signed.