In the Market: Prep steps before the mortgage process
This biweekly feature is a real estate news and information roundup from a millennial’s point of view. When a young professional moves from Indianapolis (median home price $125K) to San Francisco (median price $1 million), you can expect an adventure. Nneka Madus, an analyst in Bank of the West’s Mortgage Division, did just that and has plenty to share in her quest to own a home in San Francisco.I would love to own a home one day, but right now, it’s unlikely. For one, I live in one of the most expensive housing markets in the United States. Secondly, I have these pesky student loans to pay back. Student loan payments are a drag. It’s a drag to pay them, and they drag down your ability to put money toward something else … like a home, perhaps? However, all hope is not lost. As much as I love San Francisco, I can always move to a more affordable location. As for my student loans, there is a way to potentially reduce the challenge. I might not be able to get rid of them quickly, but as Marcie Geffner explains in the Bankrate.com article, it may come down, in part, to how I manage my debt in order to qualify for a mortgage. Fortune favors the prepared. Preparing yourself ahead of time will help make the home-buying process smoother. These eight tips that Brena Swanson has prepared in this HousingWire article may come in handy whether you’re a novice or seasoned homebuyer. Following the outlined tips before starting the mortgage process can alleviate many of the problems homebuyers typically face. For starters, check your credit report — from all three agencies (Equifax, Experian, Trans Union). This way you can check for mistakes on your report.
You think it may not happen to you, but it can. It happened to me! Several years ago, I checked my credit report to find auto financing on my report. It wasn’t mine, but someone’s whose name was very similar. Believe me, getting tripped up over a credit report mistake or lack of preparation during the mortgage process is a hassle you can do without. Be prepared, and save yourself a headache.There are things you probably don’t want to do during the mortgage loan application process, like apply for a new credit card. Underwriters, the people who make the credit decision in a loan application, have guidelines they have to follow to determine your creditworthiness and how much you can afford. Changing your financial profile in the midst of the loan process may hurt your chances for approval. You may improve your chances of becoming a homeowner by reading the tips in this article from Kevin Cash at Nerdwallet.