Phone: 360.305.2403

This page has useful tips to make your borrowing process go a little smoother. Doing some work in advance can help make sure that you can qualify for the loan amount you want. Check the list below for some points to keep in mind when shopping for a new loan.

Check your credit report

Mortgage brokers say a large number of buyers apply for a mortgage without knowing if they are really very likely to qualify. Before attempting to qualify, obtain a copy of your credit report and examine it carefully. If there are errors, contact the companies and get the errors corrected. Your FICO credit score is a 3 digit number that is used to determine your chances of getting a loan. The higher the FICO score, the better. You can sometimes find places that will run your credit report for free. It is a good idea to do this once or twice a year so that errors can be found and corrected quickly and not adversely affect your score.

Find a Lender

Try to get Pre-APPROVED not just Pre-Qualified. Many people think these are the same, they are NOT. Pre- qualification is a casual process where a lender tells you the price range you should probably be able to qualify for. This is based on information from your credit report and information you provide about your income and expenses. Getting Pre-Approved is a much more formal process that almost guarantees that you will get the loan amount that you are approved for. Being Pre-Approved for a loan makes sellers much more willing to accept an offer that you submit.

Don’t Borrow too Much

Keep a slush fund. Many people feel that getting the biggest loan they can is the best idea. That may not be the case. If the home needs to be fixed up, or if there are changes you know that you will want to make, then you will need some extra financial safety margin to pay for those things. If you have already borrowed as much as you can to buy the home, then there will not be any money left for the repairs and improvements you want to make. Depending on the condition of the home, the total payments (Loans, Taxes and Insurance) should be about one third of your total gross income, if the house is in good shape. If you plan to “fix the place up” you will need to reduce those costs to about one quarter of your gross income.

Special Lenders

There are several special programs that first time home buyers may use to get better rates and terms on loans. These can be reduced down payment requirements and lower interest rates. In some cases, both lower rates and lower down may be available. What programs suit you best, depends on your situation and what programs the property may qualify for.