Category Archives: Buying

WB_MFHblock-432x400Why Should I Get Pre-Approved for a Mortgage?

Buying a home is one of the more significant financial decisions you are likely to make in your lifetime, but starting your home buying process in the right way can make the entire process more enjoyable. Financing is the best place to begin in order to ensure a smooth transaction. One of the more crucial first steps in becoming a first-time home owner is getting pre-approved for a mortgage loan from a lender.

Becoming pre-approved will help you:
1. Determine a price range that is financially comfortable and affordable for you.
2. Save time by focusing your home search on only those homes within your price range.
3. Eliminate stress by completing some of the required paperwork up-front.
4.  Show any seller that you are a serious buyer, ready and able to purchase their home.

William E. Wood and Towne Mortgage want you to be best prepared in your search for a new home. A Towne Mortgage Loan Officer is ready and able to fully explain the process and provide the professional service and the advice you need to secure a home loan with a competitive interest rate and reasonable costs. We will then manage your home loan from pre-approval through closing.


How Can I Improve My Credit Score?


How Can I Improve My Credit Score?

So your credit score isn’t as high as you would like it to be. Don’t panic, there are several ways you can improve your credit score! Keep in mind that improving a credit score takes diligence and patience; it doesn’t simply happen overnight. Consistency is essential when building a strong credit score. Here are some things you can do to improve your credit score:

Get a credit card
While you may be developing a credit history through automotive loans and student loans, signing up for a credit card or two is another way to improve your credit score over time. This is a perfect example of credit scores taking time to improve: getting a credit card does not immediately improve your credit score. In fact, opening an account usually causes a small drop in your credit score initially, only to increase over time as you responsibly utilize the credit account.

    Reduce your debt
In order to boost your credit score, pay your balances off as quickly as possible. While paying your balances in full every month is beneficial and will maintain your credit score, an improvement would be to pay multiple payments throughout the month to keep your debts owed low. Not every credit card issuer offers or accepts multiple monthly payments, but it is worth asking.

Set up payment reminders
It is extremely important to pay your bills on time. Lenders are less inclined to give money to someone who is late on bill payments. Setting up reminders keeps you organized and ensures timely delivery of your money. It is better to pay bills on time than to try to save a large chunk of cash to put towards a house, foregoing bill payment in the meantime.

Under-use your credit cards
While it is important to have credit cards and responsibly use them, you should not use a credit card for every single purchase. Try to limit your credit card usage and instead use cash or a debit card; this way, the credit bureaus don’t receive a negative impression of you using almost all of your allotted credit.

Raise your credit limit
If you don’t like carrying cash, or wish to be able to use a credit card for most of your purchases, it is a good idea to try to raise your credit limit. Tread lightly with this option though – it only benefits you to raise your credit limit if your spending habits remain the same. Raising the limit and keeping your spending habits the same means that you will be using a smaller percentage of your allotted credit, which looks good on a credit report.

    Eliminate insubstantial balances
If you have a number of credit cards, each with smaller balances owed on them, this may be hurting your credit score instead of helping. It is best to consolidate your credit accounts; having one or two cards is ideal. This way, your credit report is not being bogged down with a lot of balances owed. Pay off these smaller balances as quickly as you can to improve your credit score.

 Here are some ways to manage your credit score in regards to applying for a mortgage loan:

    Offer a higher down payment
The larger the down payment you can make, the smaller the amount of money you will need to finance. This means your monthly payments will be lower and your credit score will be less affected.

    Do not apply for new loans or lines of credit during the home-buying process
If you know you are in the market for a new home, do your best not to change your credit accounts drastically. Any new credit accounts created will initially lower your score before improving it, and the lender will only see the lowered score, not the potential it has.

A credit score is not the single determinant of your fiscal responsibility. Damaging things happen; what is important is to remain on top of your credit history and take necessary steps to improve your credit score over time. Be patient and work hard – and if you need advice, reach out to a Towne Mortgage Loan Originator for some helpful tips on what a lender specifically looks for!


How Does My Credit Affect My Mortgage?


How Does My Credit Affect My Mortgage?

Similar to the application process for other loans, the application process for a mortgage loan requires the potential borrower to consent to a credit check. While this may sound daunting or invasive, it is necessary in order to receive any kind of funding for such a large purchase. In face, a credit score is usually, if not always, one of the most influential determinants of your mortgage rate.

So how exactly does your credit affect your mortgage? The simplest answer to this question is the higher your credit score, the lower your interest rate will be for your mortgage loan. This doesn’t explain much, though, does it? In fact, this might even create some more questions that need to be answered.

First, what is credit? Credit is a compilation of your credit scores and credit report, including your credit history. Car loans, school loans, and any credit card payments you have made have all affected your credit. You may not have much credit history at this point, but becoming a homeowner gives you the ability to build your credit over time. And remember, some credit is much better than no credit at all.

Second, what does a lower interest rate really mean for me? As a general rule, a lower interest rate when you are borrowing money is always better. This means that less interest will be added to your loan payment. The lower your interest rate, the less extra money you will owe the lender over time and the lower your monthly payment will be.

Third, what does a lender look for in terms of credit? Mortgage lenders look for good credit scores and the absence of bad credit marks, including defaults in payments, lawsuits, bankruptcies, etc. Your payment history is the greatest factor in the credit score, so it is very important that you remain on top of your finances, especially when applying for a mortgage loan. While extremely important, your credit is not the only thing a lender will examine before approving or denying you a mortgage loan. If you would like more information about what to expect in terms of a credit check, contact one of our Towne Mortgage Loan Originators.