You Can Get a Good Deal
- In today’s economy, buyers have the advantage. House prices have dropped about 30% on average.
Mortgages are Cheap
- Rates right now are the lowest that they have EVER been in recorded history. You are likely to never see these rates again in your lifetime.
You’ll Save on Taxes
- You can deduct mortgage interest from your income taxes. You can deduct your real estate taxes and you’ll get a break on capital gain when you sell.
It’ll be yours!
- You can make customize the house to be the way you want it and no one can say anything otherwise. You’ll feel better about the money you’re spending on the house because you know someone else isn’t benefiting from the upgrades and time you spend in the house
You’ll Get a Better Home
- It can be really hard to find a good rental. If you want a nice home, you’re better off buying.
It Offers Some Inflation Protection
- Studies suggest that over the long-term, housing has a tendency to beat inflation by a couple of percentage points.
It’s Risk Capital
- When the economy does go up sooner or later, real estate prices will too. Meaning that you will gain equity in your home as the economy starts to rise again.
It’s Forced Savings
- If you are paying less in rent than you would be paying a mortgage, you will end up with extra money in your bank account. But will you really save that money towards your future? Most likely not. Paying a little more each month shouldn’t be considered a cost, as you are really just paying yourself by building equity.
There is a Lot to Choose From
- The National Association of Realtors announced inventory of around 4 million homes currently for sale. That’s way above average meaning that you have a wide selection of homes at great prices.
Sooner or Later, the Market will Clear
- Demand and supply will meet eventually. The population is growing and the housing market will eventually work itself out. Now is the time to buy while it is still a buyer’s market.
*Information presented in this flyer is courtesy of the Wall Street Journal.
Mortgage lenders require copies of your most recent pay stubs from the last 30 days. If you are a prospective buyer who owns his own business or works on a commission basis, additional documentation of income – up to a year’s worth of paystubs or profit and loss statements will also be required.
If the prospective buyer is unemployed (because he or she is retired) copies of retirement payments, award letters, pension plans and social security will be required.
Bank Account Statements
Mortgage lenders require all pages of checking and savings bank account statements for the past two months are required. All pages of retirement bank account and assets statements are required as well, no internet printouts.
Copy of Lease or Rental Verification
A document verifying the last two years of residence are required by RPM Mortgage. If you rent, please provide the name and phone number of your landlord, the amount of rent that was paid and how long you lived at each residence.
An employment verification form is also required including the name and phone number of a contact person from your current employer.
Mortgage lenders require two years full federal tax returns with all pages and the borrower’s W2 forms. No state tax return is required.
If you are refinancing a home, RPM Mortgage requires a copy of the deed to your house and a copy of your current mortgage statement. An insurance declaration page will also be helpful to determine your monthly housing obligation.
A good credit score translates into lower interest rates for home-shopping borrowers. In a mortgage lender’s eyes, the higher your score is, the less risk you are and the more likely it is you will pay off your debt. For this reason, borrowers with lower scores usually end up paying higher interest rates on their loans.
If this is you, don’t panic. There are a number of things you can do to adjust your credit score to receive a favorable review from the underwriter. Here are a few suggestions.
Should I pay off all my past due balances and charge-offs?
This is usually a good idea, but you only need to worry about the past due balances and charge-offs that have occurred in the last two years. Items more than two years old have little effect on your current credit score. In fact, if you pay off delinquent items over two years old, it can actually bring your credit score down – something you don’t want to do. Bringing that score up means you’ll get a better interest rate on your loan.
Should I close existing credit card accounts that I don’t use?
No. Part of your credit score is based on your credit history. If you have old credit cards that you don’t use very much, you still have the benefit of the credit history they represent.
Rather than trying to pay off all your credit cards, you can move part of the debt from one card to another to even out the distribution of debt. Try to keep balances as close to zero as possible and definitely below 30% of the available credit limit when trying to purchase a home. Also, if your credit provider will increase your line of credit, the ratio of debt to available credit is automatically reduced.
When married couples have separate credit card accounts, the debt can be transferred from one spouse to another to clear up credit issues for the other spouses. That spouse with clean credit can be designated as the sole borrower on the loan, but ownership can still go in both names.
What about errors on my credit report?
If you have items showing up on your credit report that you know you have already paid, request that these items be removed by the credit bureau. They are obligated to rectify this within 30 days.
If there are items on your credit report that are less than two years old, send in your payment if possible and mark the back of the check with the following notation, “Accepting this check is evidence that the transaction is complete and the charge will be deleted from my credit record.” If necessary, the cancelled check will be proof that this should be removed from your credit report if it interferes with the closing of your loan.