Category: Mortgage

How to Get Approved for a Mortgage

Getting approved for a mortgage isn’t a complicated process. You need to make sure that you have all the proper documentation to increase your chances.
 
  • Check your credit score
  • Bring a nice down payment
  • Review any outstanding debts you have
  • Try to get pre-approved for a mortgage before going out to look at homes
 
If you’re moving from one existing home to another or are embarking on your very first home ownership adventure. The first thing you need to do before thinking about closing the deal and moving in getting approved. Mortgage approval requirements vary based on a lot of factors such as your pre-existing credit score, salary, marital status, and more.
 
You can get pre-approved for a mortgage by lenders before even stepping foot into a property. This is commonly known as pre-approval. By doing this, you will be able to gain a clear vision of what houses you can afford. And importantly, which ones you should avoid altogether.
 
Pre-approval isn’t the only way to get approved. Several programs are designed to help people secure a mortgage on their dream home regardless of their current financial status. To better understand what you can expect when trying to get a mortgage, we’re going to give you a detailed breakdown below.

How To Get Approved For A Mortgage

Getting approved for a mortgage

When you find the home you want, you will have to sit down with your real estate agent and whatever broker owns the property. This is where all of the mortgage approval happens, to begin the process, you need to bring a few essential documents with you.

Here are all of the things lenders look for when deciding whether you are approved for a mortgage.

Factors That Impact Your Odds Of Being Approved For A Mortgage

  • Total monthly income
  • Credit Report
  • Summary of All Your Current Monthly Debt Payments
  • Down Payment
  • Sensible Idea of How Much You Can Afford

Once you have all these pieces of information in order, you will be able to begin the process of applying for a mortgage.

Closing the deal

The final decision as to whether you’re approved or not lies in the hands of the lender. Some lenders take all of the factors we mentioned above into consideration when making their final decision, while others only consider a few of those variables. If you’re unsure about how likely you are to get approved for a particular mortgage, go online and look for a pre-approval program so you can get a clear picture of how much house you can afford.

People Also Ask

Q: How can I get approved quickly?

A: The best way to get approved for a mortgage reasonably quickly is by having a concrete understanding of your financial situation before going out to look for homes. Here are some tips you can use to secure a home mortgage loan pretty fast: establish a clear budget before looking for homes, know your credit score, have cash on hand, pay off any of your outstanding debts, and try to gain pre-approval status.

Q: How hard is it to get approved for a mortgage?

A: Getting approved for a mortgage is not difficult; however, it can be a complicated process depending on all of the factors impacting your specific situation.

Q: What credit score do you need to get approved for a mortgage?

A: FHA loans require that you have a minimum credit score of 500-580 depending on your down payment amount. For other mortgage types, the minimum score is about 620.

Conclusion

We’ve covered all of the important facts and information that you need to know about securing a home mortgage. Ask yourself these two questions before starting the process, “How much house can I reasonably afford?” and “What is my credit score?” These will help you increase your odds of getting approved for a mortgage.

Here is a great article from Investopedia.

You may also want to read our Prequalify For A Mortgage page.

Can you get a mortgage with no credit?

Can you get a mortgage with no credit?

Can you get a mortgage with no credit? If you want to buy a home but have a limited or nonexistent credit history, it can be difficult. You need to find a mortgage lender who will accept your application. Most lenders need applicants to have some sort of credit established. This can be through car loans, student loans, or such like.
Yet, FHA loans allow you to buy property without the need of having to show your credit score. You can use “non-traditional forms of credit”. For example, this can be proof of your rent payments, to apply for an FHA loan. For first time home buyers, finding a mortgage lender willing to get you in a home is no problem.
But, that’s because they need you to have a good credit score. Additionally, having good finances before you can get approved for a home loan is better. This may not be challenging to most. There are individuals who have a limited or completely empty credit profile. If you’re one of those people, the good news is that you can still buy a home with an affordable interest rate. Even with a low down payment. So, to get a mortgage without any prior credit history, you will have to apply for an FHA loan.
 
FHA loans are the best option for anyone interested in buying a home the first time but don’t have the credit to do so.
If you want to learn more about FHA loans, continue reading to find out all the critical details you need to know.
 

Is it possible to get a mortgage without credit?

Most lenders require that you show some proof of credit history when applying for a home for the first time. But, with FHA loans, you can get approved for a home. Show receipts that you’ve paid your rent on time or any other valid proof. Substantiate your claims of being financially responsible.
 
Keep in mind; even FHA loans have specific requirements. You must meet these to be eligible to receive the benefits of this specific loan type. For most standard mortgages, you must have a credit score of at least 600 or higher to qualify for financing. With an FHA loan, you need to show proof that you’ve paid your utility bills on time to qualify.
 
Here are some of the documents you can use to apply for and get approved for an FHA loan:
 
  • Car insurance payments
  • Rental payments
  • Utility payments
 
As long as you have one or a combination of these documents, you will be able to qualify for approval for an FHA loan. You can apply without needing an actual credit score.
 
How to get a mortgage with no credit
 
As we mentioned above, the only real way to get a mortgage without any credit is by using an FHA loan. When applying for an FHA loan there’s a rule. You must pay a monthly insurance premium alongside your mortgage payments.
 
Your monthly insurance premium rate will typically be in the .80%-1.05% range. Private mortgage insurance comes with conventional loan types. The MIP is no longer applicable once you reach 22% equity in your property. With FHA loans, your monthly insurance premium is mandatory for the entire life of the loan.
 
FHA loans also come with a minimum down payment requirements of 3.5%. Usually, traditional mortgages have a 5% down payment.

People Also Ask

Q: How can I get a home loan with no credit?

A: If you don’t have a strong credit profile but are interested in owning a home, you need to look into what is known as FHA mortgages. FHA mortgages are loans backed by the Federal Housing Administration, and they allow applicants to use non-traditional credit histories to apply for mortgage loans. An example of non-traditional credit history would be proof of non-delinquent renter’s payments.

Q: Do you have to have credit to get a mortgage?

A: While most lenders do require you to have some sort of verifiable credit history before applying for a loan, there are options available to people who may have a limited credit history or no credit at all.

Q: Can I buy a home with 0% down?

A: Yea, there are first time home buyers programs out there which enable you to purchase a home without paying any money at closing outside the traditional closing costs. There are other programs out there that offer deals for as little as 3% down on your home for qualified buyers.

Conclusion

We give you all of the important tips, facts, and information you need to know about trying to obtain a mortgage with no credit. Use this write-up to assist in applying for a home with no credit so that you can skip the hassle involved in applying for a traditional loan.

You may also find the First Time Home Buyers page helpful.

 

What Is Today’s Mortgage Rate?

What is today's mortgage rate?

Today’s mortgage rates are at a 10-year low across the entire real estate industry. If you’re looking to buy a new home, now is the time to do so as you will be able to find great deals on lavish properties with low-interest rates on standard 30-year fixed contracts. The average mortgage rate in today’s climate is about 3.38%-4.56%.

In today’s age, new homeowners are faced with many economic challenges that previous generations didn’t have to deal with. One of those challenges has to do with variables mortgage rates that isolate entire portions of the population from even being able to qualify for a home loan. Everything in the world is changing at a rapid pace, and the housing marketing is no different.

Depending on the type of house you buy and the length of your mortgage contract, your mortgage rate can vary substantially from let’s say someone you know or even someone that lives in the same neighborhood as you. There are other factors that impact your final mortgage rates, such as your credit score and credit history.

Below, we’re going to go over the average costs of today’s mortgage rates so that you can get a clear picture of how much you will pay when moving into a new home.

The average mortgage rate in today’s economy

Mortgage rates vary based upon several factors, as we previously mentioned. Some of these factors include the length of your mortgage contract, your credit history, and the type of mortgage you want to take out against your home.

There are five different types of mortgage options available which are:

  • Adjustable-rate mortgages
  • Conventional fixed-rate mortgages
  • VA mortgages
  • FHA mortgages
  • Jumbo mortgages

All of these mortgage types come with different contract obligations length, approval requirements, and mortgage rates. If you’re unsure about which mortgage type is best for you, consider talking to your real estate agent so you can get personalized advice about which mortgage type is right for you.

While each of these mortgage types does come with their own rate based upon the length of your contract, there is an average across the entire industry you can look at to see an estimate of how much you will pay for a home. The average rate for a 30-year fixed mortgage is about 3.38%-4.56%, and that applies for FHA, VA, Jumbo, and conventional mortgages.

There are special programs available that are designed to assist first time home buyers with getting great mortgage rates for their new property. You can also find some other specialized homeowner incentive programs that give you unique deals on mortgage rates when you meet specific qualifications.

How to get the best mortgage rate for your home

One of the best ways to get a low mortgage rate on your home is by cleaning up your credit report and ensuring that you maintain a high credit score. For mortgage lenders, an ideal credit score is about 740+ for those applying for single-family homes that will be their primary residence.

If you are interested in purchasing a property outside of a single-family home that will be designated as your primary residence, you will want to speak with your realtor and finance company to see what requirements you must meet and what the average mortgage rates are for your individual situation.

Regardless of what kind of house you are looking to get into, mortgage rates across the board are down at a 10-year low across the board, so you’ll be able to find a deal on a beautiful home with no problem. One last thing you should remember is that you want to choose a mortgage rate that is compatible with your ultimate financial goals.

People Also Ask

Q: Are mortgage rates lower today?

A: When generally speaking, yes. Today’s mortgage rates are, on average, .03% lower than average fixed mortgage rate for 30-year loans in previous years. This is good news for any homeowner that is looking to purchase their first property right now as you can find tons of deals on great-looking properties that are affordable.

Q: What is the lowest mortgage rate ever?

A: The lowest mortgage rate ever recorded was during the week of Apr 30, 2020, when the national mortgage rate dropped to 3.23%, which is the lowest rate ever recorded by Freddie Mac since 1971.

Q: Is 3.25% a good mortgage rate?

A: if you’re looking at a 30-year fixed contract, yes, a 3.25% mortgage rate is an incredibly good rate to pay for a new home on the market.

Conclusion

Throughout this write-up, we’ve given you all of the critical details and information you need to know about today’s mortgage rates and how to find the perfect terms for your next home acquisition. Use all of these tips so that the next home you move into can come at an affordable price while also having all of the critical features you want most.

Here is a great article on Seven factors that determine your mortgage interest rate

You may also want to have a look at our main mortgage rate page

A Valued Partner

No Better Time To Buy

A friend of mine who is far smarter than I am – hold the snide comments – sent me a link to an article that was written about two weeks ago.  I’ll include a link to the article below if you really want to read it:

http://bit.ly/2020REoutlook

This article is one of those that point out the reasons we should all be happy and dancing in the streets relative to how well the real estate market is performing . . . and for those of us who are homeowners, new and veteran, we do have great reason to be happy (although I’d recommend you be careful about dancing in the streets for a whole host of reasons – traffic, public safety, lack of coordination, etc.).

Two of the points the article makes are the economy is strong with little to no signs of slowing down and house values continue to increase at a healthy rate.  And just as your overall sense of warmth and fuzziness is about to envelop your whole self like a cozy bubble, you near the end of the article when you read a line that pops that bubble by mentioning that there’s an influx of buyers looking to flood an already constrained market.  Why would that be a bubble popper?

While the market is ready to welcome more buyers to the market as the Millennials age into and is prepared for it, there’s no mention in this article (or a whole host of others) that there’s an increase in inventory in the foreseeable future.  Translation: there’s still only X number of homes to sell and buy in 2020, so what are we as agents and mortgage professionals doing to get a portion of that market?

This year, we’ll see smarter, more savvy buyers who will be ready to “battle” for that limited inventory, and that will help weed out the agents and lenders who aren’t smart and savvy, for sure.  However, if that’s your only plan – outlasting a battle of attrition – to grab market share in 2020, that attrition will get you, too.

We don’t need to be shouting from our electronic soapboxes on social media that there’s no better time to buy than now or any other OBVIOUS truths – today’s potential homebuyer already knows that and will probably tune us out if that’s all we have to preach.  We need to go on the offensive and show the potential homebuyers WHY we’re the person they should hire to guide them through possibly the biggest transaction of their lives up to this point.

Over the last six months, I’ve met with a lot of great realtors who have shared marketing ideas with me that, I believe, are very smart and attractive.  They’re getting far more than the family-and-friends referral – the same referral that got so many into the business in the first place because “it was easy” – and they’re taking no prisoners.

What’s your game plan to increase your market share in a limited-opportunity market?  Is this regarded as no better time to buy? Besides providing loan products to close those transactions others can’t or won’t, our value is in helping you fine-tune and execute that plan.  If your lender ISN’T helping with that, there’s no value.

Links to other relevant mortgage articles

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