Mortgage tips in a seller’s market

Home values are up, inventory is down, and buyers are eager to purchase homes in Manhattan Beach, Redondo Beach, and Hermosa Beach. If you’re about to be a buyer in this South Bay seller’s market we’re experiencing, I have a few mortgage tips for you.

Before you look for a home, get your financial documents in order. Be prepared to have your financial statements and tax returns looked at to make sure you qualify for the loan amount you will be seeking. Recent new policies have added guidelines for lenders to follow when considering making a loan to a buyer, and we may need to see your bank statements, tax returns, W-2s, investment accounts, and documentation of any other assets. Do you have any rceent large deposits in any accounts? It’s important to be prepared so we can avoid worrisome delays.

Then, let’s lock in a rate. Mortgage rates are rising in general and will only continue to do so in 2014 as the Federal Reserve stops it’s bond-buying stimulus program. Rates can be locked for 30 days while we get the ball rolling.

Pay attention to your credit. The best rates go to buyers with very high credit scores, over 700. You can still get a loan with a lower credit score, but you can’t get the best rate unless you have good credit scores.

Last, watch how much you’re spending. Your debt-to-income ratio is very important, so everything on your credit cards will make a difference. You must keep your debt payments (and that includes the taxes on your new property) to less than 43% of your income.

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