Below are good tips for a conventional purchase. But a reverse mortgage purchase money loan actually eliminates all three points. Of course you must be 62 or over to apply for a reverse purchase loan: that is distinction #1.
Traditional debt to income ratios are not a factor unless you own an additional home other than your primary residence. What if your “old” primary becomes a rental property? You must be able to show the financial ability to carry property tax’s and insurance on both properties. If you need to make a large purchase such as a car or furnishings, you can, if you need to switch jobs you can and if you don’t have a credit card that’s ok!
A reverse mortgage purchase loan is so very, very different from a conventional purchase money loan. For example your down payment is between 30-50% with a reverse purchase and the remaining loan does not require monthly payments! This is not a 3.5% FHA down payment as some might think! Call or email me for more details to learn more about this great loan option!
Getting the best mortgage financing for your new home can sometimes be a complicated process and, unfortunately, things can go wrong. Using a licensed and trusted mortgage loan specialist can help alleviate many of these challenges.
There are certain mistakes that many homebuyers make when applying for their mortgages that can seriously damage their chances of being approved. If you are aware of the most common mortgage issues, you will be better able to prevent them when applying for your own mortgage.
Make sure that you keep the following tips in mind when applying for a conventional mortgage:
Making Large Purchases Before Closing On The Mortgage
Many homebuyers think that they are in the clear once the mortgage deal is approved and they move forward on another large purchase such as a car or home furnishings. However, it is best to hold off on all major purchases until the mortgage is finalized, as additional debt will change your “debt-to-income ratio” which could mean that you no longer qualify for the loan.
Many lenders pull your credit information right before funding, so avoid any big-ticket items until you have signed on the dotted line.
Switching Jobs During The Mortgage Loan Process
When deciding whether or not to approve your loan, the lender will look at your salary and your job stability. If you make a career move during the process of applying for the loan, this could make your income seem unstable and could cause the bank to decline your loan.
Stay in your job through your home closing date to reassure the bank that you have a stable income; you can always switch careers later.
Having No Credit Card
You might think that the fact that you have gotten by without a credit card for this long would be a positive thing in the mind of lenders. However, having no credit history at all makes lenders nervous, as they don’t know how you will handle credit when you have it.
Instead, get a credit card that you repay in full every month, which will help to show them you can manage your credit responsibly.
These are just a few examples of major mistakes that home buyers make when applying for a mortgage. If you can avoid these issues, you will find it much easier to buy a Carmel home.
As always, call your trusted home mortgage financing professional today to discuss your personal situation and get the best advice on your upcoming home purchase!