Tips for Mortgage Success

Whether you are in the market to purchase a new home or are getting ready to refinance your loan, there is no denying that a mortgage is a major investment. Choosing the right mortgage lender in Vermilion County, IL is a critical factor for success, along with several other measures you can take. 

Do Not Let Imperfect Credit Discourage You 

You may have been told that a low credit score is an impassable roadblock on the way to home ownership, but this claim is not necessarily true. While your credit score does indeed play a pivotal role in securing a mortgage, there are options available for borrowers with less-than-stellar credit. 

Federal Housing Administration-insured loans are frequently granted to borrowers with imperfect credit. If you are only able to make a low down payment, you need a credit score of 580 or higher. However, even if your credit score is lower – between 500 and 579 – you are not out of the game with Federal Housing Administration loans. In this scenario, you would need to make a minimum down payment of 10 percent, once you find a mortgage lender in Vermilion County, IL that would approve the loan. 

Borrow Conservatively 

The last situation in which you want to find yourself is struggling to make ends meet because you committed to a higher house payment than you can afford. Yes, it is tempting to take a risk on your dream home, but it can quickly turn into a nightmare if your expenses outweigh your income. Plus, falling behind on mortgage payments can wreck your credit score and severely impact your chances to purchase a home in the future. 

You can always work up to your dream house as you accelerate your career and income, and improve your credit score. Unless you have received windfall profits, it is best to err on the side of caution and ensure that your monthly debt obligations, including your house payment, do not exceed 36 percent of your income before taxes. 

Keep Your Finances Consistent Following Application 

Once the underwriting process for the mortgage has started, it is imperative that you avoid applying for new credit and maxing out your credit cards. Engaging in these behaviors could delay the closing of your mortgage or even annihilate it altogether. 

This is because your mortgage lender in Vermilion County, IL reviews your credit report and credit score twice – once at the time of application and again shortly before closing. If your lender notices significant changes, it may set off alarm bells. 

By following the aforementioned tips and visiting https://catlinbank.com/ for additional information, you can help ease the process of securing a solid mortgage. 

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Created on Oct 11th 2017 01:28. Viewed 302 times.

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