The process of purchasing your first or next home can be exciting and also occasionally overwhelming. There’s a lot to consider and plan for to ensure that you make the right choice for both your home and your financing. To ensure that you have a positive experience it’s a good idea to take a few steps ahead of time to prepare. Below are some helpful tips to consider as you go through the process.
Tip #1 – Choose the right mortgage company
Researching and choosing a trustworthy Christian mortgage company can make all the difference in your home buying experience, as you’ll be working with a company that cares about your values and morals and shares them. Christian lenders are always upfront and honest with their customers, so you’ll get full disclosure about all of the important details of your mortgage.
It’s the best way to ensure you aren’t going to get stuck with a mortgage that doesn’t fit your needs or has terms that you’re unclear about. Once you choose a Christian mortgage company, it’s a good idea to set up an initial meeting with them to discuss any important questions that you may have and to get an idea about their experience and lending knowledge.
Tip #2 – Pay down any existing debt balances as much as possible
Although your credit certainly does not have to be perfect to apply for a mortgage, you’ll want to take any opportunities to pay down existing debts that you may have prior to your application. Try to keep your credit card balances at around 30% of their maximum limit or less. If you have any personal loans or other lines of credit, paying those down will also likely be beneficial so you’ll have the widest number of potential loan options with the lowest rates possible.
Tip #3 – Avoid applying for new lines of credit
You’ll almost certainly want to avoid applying for any new credit around the time that you plan on applying for a mortgage. Applying for a car loan, credit card or most other types of loan will result in a “hard inquiry” which can have a negative effect on your credit score. You also will want to avoid closing any existing credit lines that you may have as this can also lower your score. Basically, just keep doing what you’ve been doing and continue to make payments on any existing debts you have, reducing them as much as possible before your mortgage application.
Tip #4 – Ask your lender about timing your home loan application
In many cases, you will want to apply for a mortgage sooner rather than later. This is helpful for several reasons: potentially favorable interest rates, a great deal on a home, or a solid buyer’s market. Occasionally, you may need some more time to pay down your credit balances or dispute items on your credit report, so in these circumstances it may be a good idea to wait a few months before you jump right into applying for a mortgage.
Your lender should tell you upfront if it is the right time to be applying for a mortgage or if you should take some other steps and wait. If it will serve your interests to pay down your debts a little while longer or dispute some inaccurate items on your credit report, your lender will advise you to do this so that you have the strongest possible application.
Tip #5 – Make sure you understand your loan
You’ll want to always avoid signing any loan documents that you don’t understand to avoid surprises down the road. Christian mortgage companies always strive to ensure that their customers understand the benefits and disadvantages of each loan option they may be considering before they sign.
A Christian lender will fully explain the specifics of your mortgage so that you understand your monthly payment, the amount you’ll pay over the life of the loan, interest rate, closing fees and other important obligations.
For example, if your interest rate is expected to go up or down at some point in the future as it would with an adjustable rate loan, your lender should disclose these details to you and explain how your monthly payment will change.
Contact Mike and Brian today for more information about Christian lending
Mike Rakeman & Brian Schiele are the founders of Fellowship Home Loans, a leading Christian mortgage company. We always put the needs of our customers first and operate on Christian principles of honesty and reliability.
We strive to exceed your expectations, and we can assist you with your next home purchase and answer any questions that you may have about the process. Visit us at http://www.fellowshiphomeloans.com today for more information or call us at 1-800-804-7283.