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Posted by CENTURY 21 CUDDY on 7/15/2018

If you plan to buy a house, you'll want to apply for a mortgage before you launch your house search. That way, you'll have your finances in order and can narrow your home search accordingly.

Ultimately, there are several steps that you should take prior to applying for a mortgage, and these are:

1. Check Your Credit Score

A bank or credit union likely will analyze your credit score as it reviews your mortgage application. However, you can find out your credit score free of charge before you kick off the mortgage application process.

You are eligible to receive a free copy of your credit report annually from each of the three credit reporting bureaus (Equifax, Experian and TransUnion). Submit a request for your credit report today, and you can receive comprehensive insights into your credit history.

2. Examine Your Earnings and Debt

How much you currently earn and your outstanding debt could play pivotal roles in your ability to acquire a favorable mortgage. Thus, you'll want to examine these factors closely so that you can better understand how lenders will view your mortgage application.

Also, if you have lots of outstanding debt, there is no need to worry. If you allocate the necessary time and resources to learn about your debt and pay it off, you can increase the likelihood of obtaining a favorable mortgage.

3. Establish a Budget

Although a mortgage may prove to be essential to buy a house, it is important to consider various homebuying expenses as well.

For example, you may need to pay closing costs, home inspection fees and other expenses throughout the homebuying process. If you're worried about having the necessary finances to cover these costs, you may want to start saving money for them as soon as possible.

It often helps to account for the costs associated with cable, electricity, internet and other home must-haves too. The aforementioned homeownership expenses can add up quickly, but those who plan ahead can ensure they have sufficient funds available to cover these costs.

As you prepare to search for a house, it usually is a great idea to hire a real estate agent. This housing market can help you prepare for each stage of the homebuying cycle and ensure you can achieve your homebuying goals.

Typically, a real estate agent will meet with you and find out what you want in a dream house. This housing market professional then can keep you up to date about residences that match or exceed your expectations.

Perhaps best of all, a real estate agent understands that no one should be forced to overspend to acquire their ideal residence. As such, this housing market professional will make it simple for you to discover a terrific house at a budget-friendly price.

Lastly, don't hesitate to reach out to a real estate agent for guidance before you apply for a mortgage. With a real estate agent at your side, you can learn about lenders in your area and find one that can provide you with the financing that you need to purchase your dream house.




Tags: Mortgage   Buying a home  
Categories: Mortgage   Buying a Home  


Posted by CENTURY 21 CUDDY on 5/20/2018

If you’re a first-time homebuyer, odds are you’ve thrown the words “prequalified” and “preapproved” interchangeably. However, when it comes to home loans, there are some very important differences between the two.

For buyers hoping to purchase a home with a few missteps and misunderstandings as possible, it’s vital to understand the procedures involved in acquiring financing for a home.

Today, we’ll break down these two real estate jargon terms so that you can go into the mortgage approval process armed with the knowledge to help you succeed in securing a home loan.

Mortgage prequalification

Let’s start with the easy part--mortgage prequalification. Getting prequalified helps borrowers find out what kind and what size mortgage they can likely secure financing for. It also helps lenders establish a relationship with potential customers, which is why you will often see so many ads for mortgage prequalification around the web.

Prequalification is a relatively simple process. You’ll be asked to provide an overview of your finances, which your lender will plug into a formula and then report back to you whether or not you’re likely to get approved based on your current circumstances.

The lender will ask you for general information about your income, assets, debt, and credit. You won’t need to provide exact documents for these things at this phase in the process, since you have not yet technically applied for a mortgage.

Prequalification exists to give you a broad picture of what you can expect. You can use this information to plan for the future, or you can seek out other lenders for a second opinion. But, before you start shopping for homes, you’ll want to make sure you’re preapproved, not prequalified.

Mortgage preapproval

After you’ve prequalified, you can start thinking about preapproval. If you’re serious about buying a home in the near future, getting preapproved will simplify your buying process. It will also make sellers more likely to take you seriously, since you already have your financing partially secured.

Mortgage preapproval requires you to provide the lender with income documentation. They will also perform a credit inquiry to receive your FICO score.

Mortgage applications and credit scores

Before we talk about the rest of the preapproval process, we need to address one common issue that buyers face when applying for a mortgage. There are two types of credit inquiries that lenders can perform to view your credit history--hard inquiries and soft inquiries.

A soft inquiry won’t affect your credit score. But a hard inquiry can lower your score by a few points for a period of 1 to 2 months. So, when getting preapproved, you should expect your credit score to drop temporarily.

After preapproval

Once you’re preapproved for a mortgage, you can safely begin looking at homes. If you decide to make an offer on a home and your offer is accepted, your preapproval will make it easier to move forward in closing on the home.

Once the lender checks off on the house you’re making an offer on, they will send you a loan commitment letter, enabling you to move forward with closing on the home.





Posted by CENTURY 21 CUDDY on 5/6/2018

FHA loans have long been a valuable resource for Americans who want to fulfill their goal of homeownership but who don’t have the benefit of a lengthy credit history and equity.

If you’re hoping to buy a home in the near future but want to explore all of your options in terms of financing, this article is for you.

Today we’re going to talk about FHA loans and how to know if you qualify for one.

What are FHA loans?

FHA loans are issued by private mortgage lenders across the country, just like regular mortgages. The difference, however, is that an FHA loan is “guaranteed” by the federal government.

Lenders decide your borrowing eligibility, and how much you can borrow, by determining risk. If you don’t have a sizable down payment (oftentimes 20% or more) and you have a low credit score, most mortgage lenders will see you as a risky person to lend to.

When you get an FHA loan, however, the federal government assumes some of that risk, allowing you to secure the loan anyway.

This means you can buy a home with a low credit score, a smaller than usual down payment, and save on some closing costs.

How do I qualify for an FHA Loan?

To find out if you qualify for an FHA loan, you’ll head to the same place as a traditional mortgage--a mortgage lender. Oftentimes, you can simply call or visit the website of lenders to get the process started.

As with all things, it’s a good idea to shop around for a mortgage lender. Their offerings will be largely similar, but there might be minor differences that make one better than another for your particular circumstances.

Down payment requirements

To secure an FHA loan, you will need to make a down payment of at least 3.5%. However, this low down payment comes with a price. You’ll typically be required to pay private mortgage insurance (PMI) fees on top of your accruing interest for your loan.

Credit score requirements

While you can often secure a mortgage with a lower credit score through an FHA loan, there are still some requirements. To secure a loan with the lowest possible down payment (3.5%), you’ll need a credit score of 580 or above.

Previous homeowners and FHA loans

A common misconception about FHA loans is that they are only for first-time homeowners. However, you can still qualify for an FHA loan if you’ve owned a home before as long as it has been three years since you’ve had a foreclosure or two years since filing for bankruptcy.

If you meet these three conditions, you should be able to secure an FHA loan through a traditional mortgage lender.




Categories: Mortgage   Buying a Home   FHA Loans  


Posted by CENTURY 21 CUDDY on 10/8/2017

There’s many different myths about buying a home that may have been presented to you as fact. All of these rumors could have you believing that being a home owner is a dream. Here, we’ll debunk some of the most common misconceptions about home buying and give you the tools to solve any issues that you may come across in the process of securing a home loan.


If You Don’t Have 20% To Put Down On A Home, You Can’t Buy


Many conventional loans do require a 20% down payment on a home. There’s also many different loans available that may suit your needs. From Federal Housing Administration loans to Veteran’s programs to down payment assistance programs, there’s many different things that can be done to help you buy a home. Keep in mind that any time you put less than 20% down, you’ll need to provide additional mortgage insurance, also known as PMI or private mortgage insurance.  


If Your Credit Score Is Terrible You’re Out Of Luck

If you want really good mortgage rates, having great credit is very important. If your credit score is low, your rates tend to be much higher. A really low credit score could keep you from getting a loan completely. FHA loans allow you to still qualify for a loan with a credit score as low as 580.


You Need To Make Bank To Get Money From The Bank


Monthly annual income is just one of the factors that’s considered when it comes to getting a loan to purchase a home. Your debts matter just as much if not more. People with significant credit card debt and other loans may be denied a home loan even if they have a substantial income. 


You’re In The Clear If You’re Pre-Qualified


Pre-qualification is much different than pre-approval. Pre-qualification involves giving your lender basic information about your finances in order to estimate how much of a loan you can get. This will give you a ballpark figure of about how much you’ll be able to borrow. Of course, this is very helpful in the home search process, but you’re not done. To get pre-approved, you’ll need a complete mortgage application in order to have your complete financial background check and credit rating.  


If You’ve Met One Real Estate Agent, You’ve Met Them All


This couldn’t be further from the truth. Your relationship with your real estate agent is going to be quite close. You’ll need to share somewhat personal information in order to secure a house you’ll love. Agents are involved in one of the biggest decisions that you’ll ever make. Each agent has his or her specialties and knows different neighborhoods better than others. Definitely go with a real estate agent that you feel comfortable with and knows their stuff.  


Closing Costs Aren’t Your Responsibility


Sometimes, sellers do pay the closing costs in the sale of a home. It all depends upon how the negotiations go with the home. You’ll need to be prepared for upfront costs in buying a home. These include a credit check, attorney fees and property insurance. As a buyer, you’ll be paying anywhere between 2 and 5 percent of the purchase price of the home.  


It’s important to be prepared and to stay informed in order to make sound financial decisions throughout the process of purchasing a home. Everything will be that much more exciting when you have all of the pertinent information that you’ll need.







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