Understanding and selecting a mortgage is not all that hard to tackle after you cut through the jargon and know how to think about your overall situation and goals. Unfortunately, when you apply for a mortgage, obstacles may get in your way. I'd like to attempt to show you how to glide by these irritating and sometimes not-so-trivial challenges.
Few things in life are more frustrating than not being able to have something you really want. If you buy a home and you cannot finance the purchase of it, odds are that your dream will have to be put "on hold".
Don't despair if obstacles stand in your way. You may have to exhibit a little bit more patience than usual. I've not met in all my years in the business a person who was determined to buy a home and was NOT able to overcome credit or other problems. My hope is to be able to show you how to get the financing you need and deserve!
The first topic in this series I would like to address is:
Insufficient Income
Your lender may be inclined to reject your loan application if you appear to be stretching yourself too thin financially. Although getting angry is a natural first reaction, you should actually be grateful. Why? Because the lender may be doing you a huge favor by keeping you from buying a home that will prevent you from saving money and achieving other financial goals that may be important to you over time.
If you know that you can afford the home that you have your sights set on, here are some keys to getting your loan approved:
1. Be patient. When you have a low income (for example, if you're self-employed and have been deducting everything but the kitchen sink as your business expense), you may need to wait a year or two so that you can demonstrate a higher income.
2. Put more money down. If you make a down payment of 25 to 30 percent or more, you avoid mortgage insurance and higher payments and in some cases get a better interest rate in return.
3. Get a cosigner. You always knew that you'd hit your parents up again someday for help. If your folks are in good financial shape, they may be able to cosign a loan to help you qualify. Be sure to consider the financial and nonfinancial ramifications of having a relative or a buddy to cosign a loan with you. Be advised, if you default on the loan or make payments late, you'll not only blacken your credit but also the credit of your cosignor's. Have a frank discussion about such issues before you enter into such an arrangement and be sure to write up a loan agreement.
This topic is the first in a small series I will be writing about. Hopefully, I can help you to avoid some stress in loan application process.
If you are in the process of looking for a home and are in need of a Florida mortgage or maybe you just have some unanswered questions before starting the process. Give me a call (321) 243-4917 or email me and I will be happy to answer any questions you might have.
JoAnn Young, Melbourne, FL
