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Top Tips for Mortgage Borrowers in 2014
Tags: Bankrate, credit, Federal Reserve, interest, mortgage, Mortgage Services Professionals, msp, rate, tips | Filed in: Market Insights, Mortgages
In the market for a mortgage? Take a look at these helpful mortgage tips for 2014, compiled by Bankrate, an online aggregator of financial rate information:
1. Be Prepared to Document Your Finances Mortgage regulations went into effect in January that put new pressure on lenders to verify that borrowers are able to repay their loans. Keep track of financial documents, including bank statements, tax returns, and investment accounts, and be ready to show them to a loan officer. 2. Rates Are Rising, So Don’t Delay Mortgage rates will almost certainly climb in 2014 as the Federal Reserve scales back the economic stimulus program that helped keep rates low in recent years. If you are planning to get a mortgage, don’t put it off much longer. 3. Don’t Wait to Refinance, Either Owners who are paying more than 5 percent interest on their home loans still have a chance to refinance at lower rates, but those rates won’t last forever (see above). Speak to a loan officer and take a look at the numbers to see if refinancing still makes sense. 4. You Have Bargaining Power. Use It. Lenders saw a big drop in refinancing activity in 2013 as interest rates started climbing higher, so they will be more aggressive in courting homebuyers in 2014. Buyers should take advantage of the bargaining power they gain with that increased competition. Shop around for the best deal. 5. You Have New Rights, Too New mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014, giving borrowers many new rights. Learn more about these rules, and if you have problems with your mortgage servicer or fall behind on payments, take advantage of your rights. 6. Pay Attention to Your Credit Score Good credit is a essential when applying for a home loan. Monitor your credit history and score until your loan closes. The best mortgage rates go to borrowers with credit scores of 720 or higher. Though you may still get a mortgage if your score is 680, lower numbers will result in higher rates or higher closing costs. 7. Keep Your Spending Under Control You are less likely to get a home loan if you won’t have much money left each month after paying the mortgage and other obligations such as credit cards and student loans. Try to keep your monthly debt obligations — including mortgage and property taxes — to less than 43 percent of your income. Click here to read more tips If you plan to buy a home in the Bay Area or the Tahoe/Truckee region, Pacific Union’s mortgage partner, Mortgage Services Professionals, can offer loan advice and consultation to help make your purchase a success. (Image: Flickr/401(K) 2013)