Lorraine Herbert's Blog
While buying a home is a huge decision that should entail a lot of planning and preparation, applying for a mortgage can be surprisingly easy. Just like with other lenders and creditors, a mortgage lender will want to know that letting you borrow money will be a safe investment. Applying for a mortgage is all about ensuring just that.
In today’s post, we’re going to breakdown the home loan application process to help you have the best chances at a smooth and successful mortgage approval. We’ll also define some of the common terms used in mortgages that might leave you scratching your head so you have a better idea of what your options are.
Prequalification and Preapproval
Getting prequalified and preapproved for a mortgaged can both be helpful steps toward securing your home loan. The two terms mean two entirely different things, however.
In order to be prequalified for a mortgage, you typically need to only fill out a simple form (sometimes directly through a lender’s website). On this form, you won’t need to provide specifics or official documents.
Why is this process so simple? Well, that’s because getting prequalified for a loan doesn’t ensure that you’ll actually receive one. Rather, it is simply the first step toward finding out what type of mortgage and interest rates you could receive.
The next step after prequalification is preapproval. To get preapproved, you’ll have to fill out an official mortgage application. Your lender of choice will request a few pieces of information from you, including tax returns, proof of employment for the last two years, and a list of your debts. The lender will also perform a credit check to determine your loan eligibility.
At this phase, lenders will also run your credit report. This is a type of “hard credit inquiry” that details your payment history, the number of accounts you have open, and other factors that help make up your credit score.
To secure the lowest interest rate possible, it helps to have a high credit score. So, in the years and months leading up to your mortgage application, focusing on building credit will pay off.
To increase your credit score, you’ll need to focus on paying your bills on time each month. You should also avoid opening new accounts within a few months of applying for a mortgage because this will count as a new credit inquiry. New credit inquiries--including applying for a mortgage--lower your score temporarily, so it’s best to avoid them when possible.
Additional paperwork required for mortgage applications
Not every mortgage application will be the same. Depending on the type of income you receive, you may need to provide different forms of income verification.
Each person will also have to claim different debts and assets. When buying a home with a spouse or partner, it’s important to consider your debts, assets, and credit scores to determine if it’s better to apply jointly or separately.
36 Breakneck Rd, Sturbridge, MA 01566
Perennials are beautiful plants that bloom and breathe new life into any surrounding. Unlike annuals, they don’t have to be ripped up and replanted each and every spring. Here are a few lovely perennial flowers that’ll bring life to your home year after year, with very little maintenance!
Valerian is a plant better suited in garden beds since it can grow up to five or six feet tall. It has fragrant flowers that are highly fragrant and definitely pleasing to the nose. It has beautiful little flowers that sprout atom thin stems ranging from white to pale pink.
These are great for the garden beds or larger container planters, and have incredible longevity. They are spectacular for putting on a good show, with their large four to six-inch fragrant flowers and glossy green foliage. With full sun and good soil, peonies will make your garden or porch the talk of the neighborhood.
Another lovely showstopper for almost anywhere in your garden is the deep and stunning Chocolate Cosmos. At up to 3 feet tall and around a foot wide, these flowers are great for garden beds, containers, borders, and just about anywhere else you can think to put a plant. They, as their name implies, have a strong aroma of dark chocolate, and deep, nearly-black centers. Chocolate cosmos are always a hit with garden enthusiasts!
These, along with many others, are excellent options for low-maintenance beauty that will last you all year. Perennial flowers are also an excellent option to help save money overall on your gardening costs since they don’t need to be repurchased every season or every year.
10 School St, Sturbridge, MA 01518
So what will 2020 bring to the real estate market? While market trends can, and do, change on a whim, some activity seems to be easier to predict. If you’re entering the market this year as a buyer or seller, having a better understanding of these trends will help you make informed decisions, so here’s what you can expect.
1. Home Prices Rise, but Slower
Home prices have been on the rise in the past couple of years. This trend is expected to continue in 2020, but the rise will be a bit slower. Freddie Mac warns of an economic slowdown this year, and expects price growth to be around 2.8, compared to 3.3 in 2019 and 5.0 in 2018. This is good news for sellers, but it’s also good news for those who aren't considering selling this year. Rising home prices means your equity will increase or hold steady.
2. Drop in Mortgage Rates
Next, interest rates are expected to drop for most loan types. In 2020, expect to see averages below four percent for most types of loans. Of course, this particular trend can change suddenly, but if it remains on track it will mean more interested buyers in the market. This can help sellers.
3. Homebuilders Focusing on Starter Homes
Demand for starter homes is on the increase. There are two reasons for this. First, many people who would normally be listing their starter homes are choosing to stay put, because younger homeowners are valuing community more than owning a large home. Second, Baby Boomers are starting to look for smaller “starter” homes as their downsized homes. This creates an additional number of buyers competing for the type of home that appeals to first-time buyers. Because of this demand, many homebuilders are focusing on building in this demographic.
4. Millennials Dominating the Market
Millennials, those born between 1980 and 1998, are going to be the largest generational group in the home buying market. Many of these young adults waited to buy their first home until they were well established in their careers, and are now ready to make the purchase. Others are ready to move out of their starter home and into their forever home. These buyers use the Internet primarily to help them in their home search and are looking for the home’s location and features, rather than a huge home with lots of square footage.
Market trends are never set in stone. Economic factors can change and impact these trends, but based on current projections, these are a good indication of what the 2020 home market will bring.