South Plainfield Mortgage – Alliance Mortgage
As a South Plainfield mortgage professional serving New Jersey, the Alliance team is often approached by people who are looking for a loan but are not quite sure how the process works.
There are many reasons why someone may apply for a loan. For example, a person could be buying a new property, they could be interested in refinancing their mortgage to take advantage of potential cash savings or take out some equity as home prices appreciate.
Whichever your specific situation is, you can use the tips below to help you increase your chances of having your loan approved.
1. Have cash on hand
Lenders require a down payment when purchasing a home, and this amount could vary depending on the lender and loan program you apply for.
A safe bet is that a minimum down payment of 3-5% will be required from you. There are loan programs that allow 1% down payment that depend on the property address and your income level. In addition, if you are a Veteran there are options with 0% down payment as well however you would need to fit in the VA guidelines.
Be aware that additional expenses do exist when buying a home. Expenses such as closing costs, costs for home inspections and escrow requirements are important to budget for. Make sure that you save some money before applying for a mortgage loan as this will save you potential issues down the road. The amount needed for closing cost and prepaid items will vary and depend a lot on the third-party vendors you chose such as your attorney and title company. For a home with a purchase price around $500,000, for example, you should budget $6,000-$10,000 towards closing cost and prepaid requirements.
2. Know your credit
It is important to know what information is included on your credit report to ensure it is accurate. All individuals can view their credit reports for free every 12 months. This check will not impact your credit score. It is important that you review your credit report so that there are no mistakes that could end up costing you a mortgage loan. Credit reports can be checked at https://www.annualcreditreport.com.
A good credit report is ideal for getting a loan approved, meaning that it is very significant to ensure that you have a good score that lenders will take a liking to. If you constantly have missed or have late payments and/or a high debt with minimal payments, your credit score could be negatively affected.
3. Know your spending limits and stay within it
Always set a limit of what you can afford and don’t navigate away from it. It’s important that you are completely honest with yourself because only you and your family know the exact amount you can afford. Although a mortgage professional such as one from Alliance Mortgage can help determine an amount that you can afford from the point of view of a mortgage, we don’t always know the day-to-day costs that you and your family deal with.
Have a plan and set an amount that you will be able to pay without issue.
These tips will help your chances of being approved for a loan. However, it is always a great idea to speak with a mortgage professional to help you through the process with your specific situation and get the best deal.
If you’re looking for a mortgage for a property in New Jersey, get in touch with our team today! Alliance Mortgage is always ready to help clients find the mortgage they deserve.
Please keep in mind that we are a mortgage broker helping obtain financing for New Jersey properties. While most of the financing guidelines are the same throughout the country there are some that are state specific. So please consult with your mortgage broker for loans outside of New Jersey.