As the busy Spring housing market arrives this year, you may find that there is a lot of competition for some of the choicest or best priced homes in Oakland and Piedmont. It is important that you get pre-approved for a home loan, so that you will be an excellent choice among potential buyers for that ideal home that you want. It is especially important that you leave nothing to chance about your ability to finance that home.
Lenders are looking at a number of things when they are considering your request:
1. Your Credit Score--While this may seem obvious, this credit score, and your credit history tells lenders a lot about you. In essence, this score is their key indicator as to how responsible you are about acquiring debt, and then paying it back in a responsible and efficient manner. It will most certainly affect your final mortgage rate.
2. How Much You Plan to Borrow--If you are planning to buyer in a higher priced housing market, you will typically be asking for more funds than the current "conforming loan limits", and will need to obtain a jumbo loan, which can typically have a higher ultimate mortgate rate. Obviously, how much you can put down for the purchase makes a big difference in the ultimate mortage rate as well.
3. Whether You Pay Points--If you are willing and able to pay more money up front to get a lower mortgage rate by "paying points", you should make sure that your loan officer knows about this. Since one "point" is equal to 1% of the loan amount, by paying points, you could obtain a lower mortgage rate.
4. Whether This Home Will Be Your Primary Residence--If you plan to live in this home as your main residence, you will be offered what is called an "owner occupant" mortgage rate. this is generally a lower than would be offered if you were buying the home for rental purposes, so be sure to make that clear to your loan officer.
Obviously, these are just some of the major considerations that will come into play as you are involved in setting up your pre-approved loan. Additionally, after my many years in the local housing market, I am more than pleased to help you get started down this important path.
Posted by Bruce Wagg on