Shopping for a luxury home in California’s lovely Redondo Beach?
If so, you should be thinking about how you’re going to finance the purchase. If you’re going to be applying for a mortgage, you should start preparing. Getting approved for a mortgage isn’t always the easiest process and buyers should take some time to strengthen their borrowing position before applying.
Here are 4 tips to help you land a mortgage loan for your luxury home.
Check Up on Your Credit Score
The first step to applying for a mortgage is to clean up your credit score.
As with any loan, the lending agency is going to be taking a hard look at your credit score. Your credit score should be strong and stable if you want to make the most out of your mortgage application.
Not only does your credit establish your position as a borrower, but it also is the key to landing low-interest rates and great mortgage terms. The lower your interest rates, the less your monthly mortgage bills will be – and this means saving money in the long run.
Before applying for your mortgage, take some time to fix up your credit score.
Build Up Your Savings
The second step is to start saving up for your property’s downpayment.
Keep in mind that many property loans require the borrower to meet a minimum down payment, which usually falls between 10% and 20% of the full purchasing price. In order to prepare for the down payment, start putting money away before you begin the home buying process.
The more you have to put down, the better off you are.
Stick to the Property’s Appraised Value
Buyers shouldn’t make an offer that goes above the property’s officially appraised value – especially if they’re financing their new home with a mortgage.
To avoid paying more than a home’s worth, mortgage lending companies aren’t likely to lend out any more than the appraised value of a property. This is to protect themselves and their investment.
Don’t forget to think about your mortgage lender when you’re making an offer on a prospective property.
Cut Down on Your Outstanding Debts
Finally, all aspiring borrowers should try to reduce their outstanding debts. Having too many open debts isn’t the best way to introduce yourself to a mortgage lending agency. Instead, try and cut back on what you owe before applying.
Paying off those long-overdue bills will help you boost your borrowing appeal and land you great interest rates and loan terms.
For more tips, check out my blog. If you’re looking to find the home of your dreams, work with me – one of Redondo Beach’s premier realtors. I’d love to assist you in the home buying process. Don’t hesitate to call me at 213.675.0197 or get in touch with me today.