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Financial #realtalk: Qualifying for a mortgage By Lauren Caggiano
There’s no such thing as being too prepared when it comes to improving your chances of getting a mortgage, especially in today’s seller’s market. It’s not out of the question for homes to get multiple offers within hours of listing. That’s why you don’t want to leave anything to chance.
8 Home Living | August 2021
what you can afford and decide what monthly mortgage payment amount you would be comfortable with.” Joel Scheer a branch manager at Ruoff Mortgage, agreed, and spoke to another potential wild card. “Sometimes you have to make yourself more marketable when we’re looking at it from the preparation point of view,” he said. “Credit card or revolving accounts are critical to keep an eye on. For instance, your utilization ratio can have a pretty big impact on your qualifying credit score. Even if you’ve never made a late payment in your life, generally if your balances at the time a credit report is authorized are more than 40–50% of what your available credit limit is, you’re likely going to see a diminished credit score.” When in doubt, consult with your lender and be open to suggestions. “I’m a big fan of trying to be as proactive and out in front of things as much as possible so that if there are a few things that we need to work on we have allowed the necessary time to do so,” he said. “When we put Ruoff’s name on that pre-approval letter, the outside world knows that we’ve done our due diligence to prepare (it).”
Resources:
Ruoff Mortgage, ruoff.com STAR Financial Bank, starfinancial.com
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Two local experts weighed in on the process and offered insight into how aspiring homeowners can position themselves for success. For starters, Lisa Keirns, a mortgage banker with STAR Financial Bank, emphasized the importance of being informed. Her advice can be best distilled into a few tips: Know your credit score, understand what you can afford, begin saving, investigate loan options, and go through the pre-approval process before seeking the advice and guidance of a real estate agent. Certain steps can take longer than others, and it’s important to anticipate the occasional hiccup. There are, however, ways you can remain in good standing with a prospective lender. “If your score is where you want it to be, try to remain ‘hands off’ as you go through the mortgage approval process,” said Keirns. “Opening new accounts and closing old accounts can negatively impact your score, so it’s best to wait until after you close on your mortgage to do things like this.” On a related note, Keirns stressed the importance of taking a holistic inventory of your finances before you begin the application process in earnest. Certain moves can help or hinder your case. That said, she offered a specific recommendation. “Sit down and go through your budget and understand your debt to income (DTI) ratio,” she said. “This is the amount of your monthly credit account payments (including property taxes and homeowner’s insurance) divided by your gross monthly income. Be realistic about
