Getting your First McAllen Home Loan
Starting out in the housing market can be intimidating for anyone. Ever since the housing market crashed in 2007, the road to recovery has been rather uneven.
This includes buyers being held back due to increasingly stricter standards for lending. Things in the housing market have been changing and showing small signs of improvement. Some rule changes have loosened up tight lending in 2015.
For starters, banks are less strict about the minimum requirements, and lenders are offering mortgages and down payments at the rate of a mere 3.5%. This may just be a good time to consider jumping into the market. Mortgage rates are at historical lows.
With the housing market heating up and consumers all ready to buy a home, it is time to begin preparing for the road that lies ahead of you. Though other parts of Texas are seeing homes sell in days, in McAllen, Tx, there is plenty of inventory and steady sales.
Understanding the Importance of a Good Credit Score
Credit health is one of the most important factors that will decide the interest you will end up paying on your mortgage.
In fact, its impact is so significant that the difference could be in the range of thousands of dollars – based on nothing but your credit score. Let us give you a small example to make this a little clearer.
Let us take $178,500, which is the median home value in the United States, as the amount in question.
Pretend that two people each own a $178,500 home and both want a 30-year fixed mortgage. They are paying the same amounts for their down payment.
The difference between these people is their credit scores. One person has a low score of 620, while the other has a higher score of 760.
In almost every case, the one with a poor credit score will end up paying more- even a 3.5 and 5 percent interest rate difference could mean $59,000 or more over a mortgage’s lifetime.
Thus, this should be an indication of why having a good credit score before you take on a mortgage is an important factor.
So what can you do to ensure that your credit is in good shape before you jump into the mortgage market? Here is a short guide to help you in doing just that.
In conclusion, it’s never a good idea to take out more than one loan at a time, especially if you are in the process of applying for a mortgage loan.
If you need to purchase something big while applying for a mortgage loan, such as a car, always try to use cash to avoid negatively affecting your credit score. Also, be ready with all of the documents that your mortgage lender will need. This ensures that the process will be as smooth as possible in the end.