Mortgage Update For Buyers Of Huntsville AL Real Estate
Good news!
- According to Freddie Mac’s most recent Primary Mortgage Market Survey (PMMS), interest rates on mortgages decreased for the second week in a row.
- One out of five bank -risk professionals now expect the approval criteria for loans to become less stringent for Huntsville AL real estate, the third highest level ever registered for looser lending standards in the three year history of the FICO survey.
- Housing prices are beginning to rise, and the increase is expected to continue.
- Obtain a copy of your credit report before loan shopping. Go online for your free credit report from each of the three bureaus and examine it carefully to detect any errors/misinformation.
- Gather all documentation. Lenders will ask for a great deal of documentation regarding your salary, savings, job stability, debts, and the like. You will need to provide pay stubs for the past 30 days; W-2 forms for the past two years; bank, retirement, and investment account statements; and a listing of debts and monthly expenses. If you are self-employed, you will also have to submit two years of tax returns and possibly a profit-loss statement. Click here for a more detailed listing.
- Calculate your debt-to-income ratio. This ratio compares the gross amount of money you earn to the amount you owe to creditors (mortgage payment, car loans, credit card payments, etc.). The lower the number, the better. Lenders generally require scores at or below 36%. To figure your own ratio, use an online calculator.
- Check out this free site that updates available interest rates daily and discloses the best “par rate” in your area. In addition, if you provide contact information, the site will forward that information to the local lender offering the best rate.
- Consider making a larger down payment.
- Make as large a down payment as you can. Given the prospect of not being able to get out of paying private mortgage insurance, some experts say borrowers who can afford to put down more than 3.5 percent on Huntsville AL real estate should consider getting a loan that’s not backed by the FHA, sometimes known as a conforming loan.
- Comparison shop for the best terms.