My New Blog

If you are considering purchasing real estate or refinancing there are important steps that you can take to prepare ensure you are able to obtain the best rate possible.

How the mortgage process works

To decide what to do with your credit cards before you apply for a mortgage, it helps to understand the process of securing a home loan, which is different from any other loan you’ll apply for.

There are three factors lenders will consider about your personal finances when determining your qualifications: your down payment, your monthly income (minus any existing debts), and your credit score. The second and third factors are the ones that can be impacted by your credit card usage.

When you first speak with a mortgage broker, you’ll give him or her permission to pull your credit histories and FICO credit scores from all three major consumer credit bureaus. While these inquiries count as a “hard pull,” the FICO scoring model doesn’t count additional inquiries for home loans made within 14 days. Brokers pull from all three bureaus because the industry standard is to judge applicants based on the middle of the three scores (or the lower of two), in order to account for any differences in the data collected.

Next, your real estate agent might ask for a pre-qualification or a pre-approval from your mortgage broker. A pre-qualification is merely the broker’s opinion of your ability to qualify based on the information that you have supplied, while a pre-approval generally requires documents to be collected such as pay stubs, bank statements, and tax returns. This additional level of verification can add substantial weight to a home contract that a pre-qualification does not.

Your mortgage broker will then help select the best lender for your needs, and you’ll be asked to submit a formal loan application. Finally, about a week before you close on your loan, your credit will be checked a final time (which is a soft pull), and your employment will be re-verified.

Credit cards can help your credit score by adding to your overall credit history, so long as you pay your bills on time and carry little debt. Your payment history and the amounts you owe comprise 35% and 30% of your credit score, respectively, making them by far the two most important factors. In addition, 15% of your score is focused on the length of your credit history, so keeping a few credit card accounts open for many years will help.

The remaining 20% is divided equally among the types of credit used and the new credit lines opened. Having credit card accounts open and in good standing will help, although applying for several new credit cards in a short period of time will hurt. 

One of the big misconceptions about credit scores is that having a higher score will necessarily lead to lower rates. To qualify for the best mortgage rates available, you need to have a credit score of 740 and above, but in nearly all cases, having a score of 760, 780, 800, or higher won’t make the slightest difference. (Scott pointed out that he has seen some rare exceptions in the past when a lender offered a specific program that required higher scores, typically for very high value loans).

Let’s say that you pay all of your bills on time and have no substantial debts other than a modest credit card statement balance, which you pay in full each month. The chances are that you’ll have a credit score in the high 700s. If you decide to apply for a new credit card, your score may drop a few points, but so long as it remains comfortably above 740, you won’t hurt your chances to qualify for the best mortgage rate

Once you have received a pre-approval from a mortgage broker or the lender the following are steps to ensure that your credit does not drop during the mortgage process.

  • Do not use credit cards excessively.
  • Do not let current accounts fall behind.
  • Do not co-sign for anyone on a new account or loan.
  • Do not give permission to anyone to run your credit (by applying for new credit accounts).

If you can avoid creating any new significant debt during the loan process you should not have any last minute surprises.  This is not the time to buy a new car, furniture or to make any large purchases.

Posted by Susan C Pearlstein on April 8th, 2015 6:58 AM
Not only have residential rates been dropping the interest rates on Commercial properties have dropped as well!

·        Floors on all 10 year Products Have Been Dropped – 10 year rate as low as 4.125% APR 4.128

·        Our Multifamily 10 Year Fixed Rate is one of the lowest attainable.

·        Attractive Step Down Prepays (prepay ends after year 6 on a 10 year loan)

·        30 Year Amortizations on all Products, including Retail, Office and Industrial Loans

·        $2,500 Fixed Costs on Qualified Multifamily Loans

If you are looking to purchase or refinance a commercial property contact us to see just how much money Statewide Funding can save you!

Posted by Susan C Pearlstein on January 14th, 2015 11:32 AM
With home listings still low why not be as prepared as possible when the time comes that you find that dream home to put an offer in on.  Contact us for a pre-approval.  We take your complete loan package and have it submitted to a lender before we issue the letter of pre-approval.  This way you are able to offer the seller a quick close!  We have been able to close a purchase within a few weeks with this method.

Contact us today at www.statewideonline.com
Posted by Susan C Pearlstein on January 4th, 2015 3:03 PM
Unless you plan on being an all cash buyer this will affect those seeking a new loan on a purchase or anyone about to refinance!

http://www.globaldms.com/blog/bid/170404/CFPB-Issues-Two-New-Appraisal-Rules-which-will-take-Effect-in-Jan-2014
Posted by Susan C Pearlstein on January 4th, 2015 3:03 PM
Posted by Susan C Pearlstein on January 4th, 2015 2:56 PM
When the stock market drops over 200 points like yesterday people panic and put their money into Treasuries (bonds), the Great News is that mortgage rates get cheaper. And if there is a complete stock market panic rates will be fantastic. You could refinance right that second if you had your paperwork in with us, but no you want to wait until rates go lower. Go toto see our current rates.

Unfortunately, even our independent adviser, www.statewideonline.com/DailyRateLockAdvisory, think rates could be headed lower. Please feel free to go to look at that link any time to get an independent perspective (it isn't necessarily ours).

Our recommendation is to go to our site www.statewideonline.com, fill out an application and get your paper work in so when the next crash comes you can lock in a great rate. Keep in mind that if asset prices continue to decline then the fair market value of your home may not keep up with deflation.

Thanks,

Sue and Alan Pearlstein
Owner/Brokers
Posted in:General
Posted by Susan C Pearlstein on April 28th, 2010 1:57 PM

Take a look at this 5 minute video and see if you are ready to save interest on your loan:

 

http://www.homeownershipaccelerator.net/

Posted in:General
Posted by on January 12th, 2010 7:35 AM

With interest rates fluxuating minute by minute we are suggesting to our clients that they submit a complete loan package now in order to stay ahead of the game and to be able to jump on a great rate when it comes up.

 

Happy New Year to all!

Posted in:General
Posted by on January 1st, 2009 11:19 AM
There are many of you out there with adjustable rates coming due in 2008.  Conforming rates are at a low!  Check you current loan balance.  Are you now at $417,000 or below?  You can now refinance that loan with conforming interest rates.
Posted in:General
Posted by Susan C Pearlstein on November 29th, 2007 8:51 AM