Top 7 Home Buying Tips from NJ MLS Realtors
Advice from NJ MLS Realtors regarding what to consider prior to purchasing a home
The housing market has gone through drastic changes over the last few years, affecting many things including the mortgage industry and its prospects. Lenders and their guidelines have become much more stringent, and the home buyers of today must be well-prepared and stable in order to obtain a home loan.
The following are 7 tips from NJ MLS Realtors for anyone seeking a mortgage or refinance in today’s market:
Become familiar with your credit.
Your credit score is a determining factor for many things, and mortgages are no different. Recently, lenders have amended their guidelines to the grant loans with the best deals to borrowers with credit scores of 740 or higher.
Try to obtain your loan as early as possible.
The Federal Reserve is arranging to discontinue the purchasing of mortgage-backed securities by the end of March. According to financial experts and NJ MLS Realtors, if this occurs then rates will increase as private investors will call for higher rates in order to balance their risk.
Get more than two loan scenarios.
When applying for a loan, a wise idea is to obtain three or four loan scenarios to compare monthly payments and total fees. This could be a cost-effective alternative to focusing solely on the interest rate.
Know your affordability.
According to NJ MLS Realtors, a big mistake made by many is giving into the temptation of taking on more than they can afford. According to the Federal Housing Administration, (FHA), a homeowner’s monthly house payments should not exceed 31% of his or her gross monthly income. In addition, the FHA caps total debt payments to 43% of monthly earnings. This includes debt such as credit cards, auto loans and first and second mortgages.
Check jumbo rates.
Towards the end of 2007, jumbo mortgage rates fell after soaring for the previous two years. In turn, rates on fixed-rate, 30-year jumbo loans fell to approximately 6%, with jumbo ARM rates also dropping. According to NJ MLS agents, refinancing can possibly be a good option for homeowners with a minimum of 20-30% equity.
Consider an affordable down payment.
Some lenders’ guidelines vary when it comes to minimum down payment amounts, but at least 10% is standard in order to qualify for a low-rate loan. Other options requiring at least 3.5% down or no-down payment mortgages are FHA, VA or RHS.
During difficult financial times, seek help from a counselor.
According to NeighborWorks America, homeowners falling behind on mortgage payments are 60% more likely to ultimately stay in their homes when they consult a counselor specializing in foreclosure. They are also most likely eligible for benefits such as lower payments or loan modifications. NJ MLS Realtors strongly recommend going this route to distressed homeowners.
The Real Estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a Real Estate professional who will provide valuable information and trustworthy advice. For more information on NJ Real Estate, call us today or click here to be connected with one of our top Real Estate specialists.