Hello, dear readers of Dripping Springs! Today, we bring you insights from a recent conversation between Ashley, a leading realtor in the area, and Bill Roegelein, an expert lender. Their discussion centers around the intricacies of applying for a loan, the home shopping experience, and some crucial “buyer bewares” to consider.
Loan Process for Home Buying
When you apply for a loan and get pre-approved, it feels like you have been handed a golden ticket to shop for your dream home. But remember, the process is not truly over until all the paperwork is signed. And, there’s a considerable amount of time between these two stages. So, what should you keep an eye out for
Bill Roegelein stresses the importance of being transparent throughout the loan process. Buyers should be proactive in sharing any financial changes or obligations. Even if something seems trivial or unrelated, it’s always best to inform your lender. This could save you from unforeseen complications down the line.
Adding significant debt, such as purchasing a new car, can seriously affect your loan qualification status. Such acquisitions can inflate your debt ratios, potentially pushing you out of the qualification zone.
What Is Considered Debt When Applying For A Loan?
Co-signing, especially for significant assets like cars, can impact your credit. Bill Roegelein elaborates that if a parent co-signs for their child, 12 consistent payments by the child can lead to the debt being excluded from the parent’s obligations. However, until then, it’s a debt that’s counted against the borrower.
Can You Buy a House If You Owe Taxes?
With the tax season around the corner, Bill Roegelein brings up the subject of tax debts. If you owe a significant amount in taxes, it’s advisable to set up an installment plan with the IRS. While these debts might not pop up on credit reports, they can certainly impact your home loan approval.
While medical debts and utility bills might not be prominent on credit reports, they are essential aspects of your financial profile. Lenders will take these into account while assessing your loan application.
Home Insurance Policy Coverage
Bill Roegelein emphasizes the importance of procuring a home insurance policy early in the home-buying process. With the Texas market witnessing some carriers being selective about their underwriting, it’s crucial to have your policy sorted in advance.
Bill Roegelein is Dripping Springs’ Financial Lender
Navigating the home loan and purchasing process can be daunting. But with experts like Ashley Tullis and Bill Roegelein, buyers in Dripping Springs, TX, can rest easy. If you’re considering a home purchase or need insights into the mortgage landscape, these professionals have your back.
Stay informed and make smart decisions on your path to homeownership. We’ll be back with more insights soon. Happy home hunting!
Frequently Asked Questions about the Home Loan Process
How do you qualify for a loan?
Generally speaking, all lenders will be looking at five primary criteria when deciding if you qualify for a loan: credit score, income, assets, debt-to-income ratio and history of employment. A good credit score is important, as it helps demonstrate your ability to pay back the loan on time. Your income should show that you have enough to cover the loan payments along with your other financial obligations. Lenders also consider your assets, such as investments and savings accounts, to make sure that you have sufficient funds if repayment becomes an issue. Additionally, your debt-to-income ratio will be checked to make sure that you are not too reliant on debt. Finally, most lenders will look at your past employment history to make sure that you have had a steady job for a while.
Can you get a mortgage without a credit score?
It is possible to obtain a mortgage without having a credit score, but it can be difficult. Some lenders may require alternative forms of proof of creditworthiness, such as letters of recommendation from people who know you well or proof of current and regular income. In addition, many lenders may require a larger down payment than usual in order to compensate for no credit score.
What’s the difference between being prequalified and preapproved?
Prequalification is the first step in the mortgage process. This involves a lender reviewing basic information about your financial situation, such as income and debts, and providing an estimate of how much they are willing to lend you. Preapproval, however, is more involved. After providing detailed financial information to the lender, you are given a letter stating that the lender has agreed to finance your home purchase up to a certain amount. This is usually seen as more reliable than prequalification and thus gives you an advantage when negotiating with sellers.
How much home can you afford?
Most lenders will recommend that you spend no more than 28% of your total monthly gross income on housing costs. This includes not only the mortgage payment but also any property taxes and insurance associated with the home. To get an accurate figure of how much you can afford, it’s best to speak with a mortgage lender and provide them with your financial details so they can give you an exact number.
How much should you save for a down payment?
There is no one-size-fits-all answer here, as it depends on various factors such as the type of loan you’re getting and how much money you already have saved up. Generally speaking, most lenders suggest at least 20% of the purchase price as a down payment in order to avoid paying for private mortgage insurance (PMI). However, this can vary depending on the type of loan you get, so consulting with a lender beforehand is recommended.
How do you know which home mortgage option is right for you?
Finding the right home mortgage option for yourself is all about doing your research and understanding what different loans offer. Speak with multiple lenders to help you compare options, ask questions and discuss specifics such as interest rates and closing costs. You can even use online resources to compare different lenders and types of loans. With patience and diligence, you’ll eventually find one that works best for your needs and budget.