Checking Your Credit

This is the top priority before you get the ball rolling. Much of the mortgage process is dependent on your credit score, from how much you can borrow to what your interest rate will be. It’s what lenders will look at when determining how creditworthy you are. The higher your credit score is, the lower the interest rate you will typically receive.

The best thing to do is to get your credit report and go over it with a fine-tooth comb. If there is anything on it that doesn’t look correct, contact the credit bureau to have it corrected. Many homeowners think their credit is worse than it actually is, and correcting errors can bring your score up.

Go Over Your Finances

Before even looking at homes, you should figure out how much you can actually afford. There is nothing more disappointing than having a client fall in love with a home and then having to break the news that it is way out of their price range. So, to avoid those disappointments, know what you can comfortably afford so that you don’t waste time looking at homes you won’t be able to get approved for. There are a lot of sites that have free mortgage calculators that you can use, including our own, which you can access here.

Save for the Down Payment

If you want to get the best rates on a mortgage, you will need to make a down payment of at least 20% of the value of the home. The sooner you start saving for a down payment, the better off you will be when it comes time to buy a home. Of course, you can put down less than 20%, but doing this usually means receiving a higher interest rate.

Have Your Lender Pre-Approve You

Whether or not you have been in touch with a Murfreesboro mortgage lender, getting pre-approved for your mortgage can really help you with buying a home. It not only lets you know how much you can afford to buy, but it can also give you an advantage when putting in a bid on a home by proving to the sellers that you have the financing in place to make the purchase.

Don’t Make Major Changes or Purchases

When you are undergoing the mortgage approval process, the last thing you want to do is make any major purchases, such as a new car, furniture or applying for a new line of credit. It’s also best not to switch jobs during this time. Any of these actions will affect your credit and could end up costing you that home you wanted.

If you want more information on what to do before buying a home, give your local Murfreesboro mortgage lender a call today. We’ll get you on the right track!

The post First-Time Buyer Checklist appeared first on Accurate Mortgage Group.

As a Murfreesboro mortgage lender, it is part of our job here at Accurate Mortgage Group to educate people about their credit score and how this score can affect their ability to get a mortgage. Credit scores affect everything from the interest rate and the mortgage amount you qualify for, to how much of a down payment you’ll need to make and whether or not you will need to pay mortgage insurance. This doesn’t mean that you can’t get a mortgage if your credit score isn’t at its best. You may end up paying a bit more, though. This is why it’s important to understand what credit scores are and how they impact getting a loan.

What Is a Credit Score

Credit scores are what lenders use to judge how much of a financial risk you are. In the United States, credit bureaus use a FICO scoring system that ranges between 300 to 850. 700 is considered to be a good score and, of course, the higher the score the better when it comes to qualifying for a mortgage. Before you decide to apply for a mortgage, we strongly advise you to review your credit report to make sure there are no errors that are negatively impacting your score.

How Credit Scores Affect Mortgages

Risk-Based Pricing 

Lenders use risk-based pricing to determine how much they are willing to lend you. If you have a low credit score, it means you are a higher risk, which will make the cost of getting a mortgage higher. A difference of 75 points on your credit score can add .05% to the rate of your mortgage. Higher scores mean you will get a better interest rate. For example purposes only, let’s say one client has a score of 750 and another has a score of 625. Both are going for a mortgage loan for $200,000 for a 30-year term. The client with the 750 credit score gets an interest rate of 3.25% and pays just over $900 a month in repayments. However, the client with the 625 credit score gets an interest rate of 4.125% and ends up paying close to $970 per month. This client will end up paying $70 more a month and about $20,500 more over the loan’s term.

Loan-to-Value Ratio

The appraisal value amount that you will be allowed to borrow is determined by a loan-to-value ratio. A good credit score can qualify you for 95% financing of the home’s value, whereas a lower score may only get you 80%.

Underwriting Flexibility

When you have a good credit score and a strong credit history, lenders tend to be a bit more flexible if you are weaker in certain areas, such as with your cash reserves, income and your down payment amount. With a poor credit history and score, lenders tend to be stricter.

Private Mortgage Insurance

When you are making a down-payment of less than 20% of the home’s value, a lot of lenders will require you to pay PMI (private mortgage insurance) to protect themselves should you default on payments. The amount they will require is based on your credit score and credit history. Becoming more familiar with your credit score and history can make a world of difference when it comes time to apply for your mortgage. Whether you need some advice on your credit or want to see what mortgage options are available to you, give the Murfreesboro mortgage lender team at Accurate Mortgage Group a call today!

The post What Is a Credit Score and How/Why Does It Affect Mortgages? appeared first on Accurate Mortgage Group.

Refinancing Made Easier

Basically, a refinance will take your current mortgage and replace it with a new one. The new mortgage pays the balance of the old mortgage loan off. You still need to qualify for a refinance, just as you would for a mortgage. The application process is pretty much the same, too. What isn’t the same is the technology now available.

Refinance on the Go

If it’s been a while since you went through your mortgage process, you are probably inwardly groaning thinking about the hassle it seemed to be the last time you went through the process. Things have changed, however, and with today’s technology, it’s a lot faster going through this process than it was years ago. Now, you can even apply for a mortgage refinance from your computer or your smartphone. It’s much easier to share documents, appraisal images, and even to sign documents with e-signatures.

Apps and Digital Cameras

Many mortgage lenders have their own mobile apps that will help you manage and track the process, as well as connect all parties involved in the process for better, faster communication. This includes real estate agents, lenders, and borrowers. There’s no more confusion about where you are in the loan process and no waiting around to find out if documents have reached their intended parties. You can find the Accurate Mortgage Group mobile app where you download your apps or click the link on our homepage at accuratemtg.com.

Gone are the days of waiting for appraisers to take pictures and then have to wait to have those developed. They can now use their smartphones to snap pictures and email them from the property within minutes. So, the mortgage process itself is a lot quicker and more transparent.

Refinance Calculators

Another handy tool is the mortgage refinance calculator. You can find our mortgage calculators here. They can help you to crunch those number and get a better idea of what you have to work with. It also lets you shop around for the best refinance deals. Bear in mind, you won’t have access to some of the great deals that our Accurate Mortgage team has access to.

Some of the things you will need to know when using a refinance calculator tool is your new loan amount and new interest rate. Once you input that data, the calculator will show you your monthly savings, new monthly payment plan, and what you will save over the life of the mortgage. It also takes into account what your estimated refinance costs will be.

Going through the mortgage loan process to refinance is a lot easier than it used to be and gives you better access and control over the process too. If you are looking to refinance your mortgage, give our local Murfreesboro mortgage lender team a call today, and we’ll find the best refinance package to meet your needs!

The post How Refinancing Your Mortgage Has Been Made Easier appeared first on Accurate Mortgage Group.