Purchasing your dream home sounds great in theory – but along the way, the mortgage process can often feel overwhelming. When you work with an experienced Philadelphia mortgage broker at Penn Street Mortgage, you can find the perfect loan program for your perfect home.
Here are some insider tips to help you secure the right loan for your dream home.
1. Understand Your Budget Inside and Out
Before exploring mortgage options, it is important to take a good look at your finances. How much can you afford? What is your debt-to-income ratio? Our team of mortgage advisors can help you figure out how much you can afford based on your income, debts, and other responsibilities.
Remember to make sure that your monthly mortgage payments fit comfortably within your budget and take into account other expenses like maintenance, utilities, and emergencies.
2. Know Your Credit Score and History
To have the best chance of getting approved for a mortgage and getting the most competitive interest rate, you will want to have a good credit score. You can use free tools online to get a free credit report and check that all the information is correct before starting the home purchase process. That way, if your FICO score is lower than you would like, you can take the time to improve it before shopping for mortgage loans. Even small improvements in your credit score can result in significant savings over the life of your loan.
3. Explore Different Mortgage Loan Programs
When it comes to mortgages, there is not a one-size-fits-all loan program. Each homebuyer’s situation is different, and so is each loan! When you work with one of our mortgage brokers at Penn Street Mortgage, we will take the time to find you the best loan program for your specific financial situation. We will walk you through the different loan options, including conventional loans like fixed-rate mortgages or adjustable-rate mortgages. Our team will make sure that you understand the advantages and disadvantages of the various loan programs available to you so you can pick the best one.
4. Get Pre-Approved
Getting pre-approval for a mortgage before you make an offer gives you a competitive advantage and gives you a deeper understanding of what your purchasing power is. When you get pre-approved for a home loan, we will do an initial evaluation of your finances, giving you an initial idea of how much you can afford and your home loan amount.
It differs from getting a pre-qualify approval, which is just an initial assessment. If you want to be ready to move fast and make an offer on your dream home, one of our mortgage brokers can assist you through the pre-approval process.
5. Consider The Down Payment
When buying a home, the size of your down payment can significantly affect your monthly payments and interest rate. Although it is possible to make a down payment as low as 3.5% with an FHA loan, a bigger down payment can unlock better loan terms and no private mortgage insurance, which will add additional monthly expenses to your payment.
Not sure how much of a down payment you should offer? A member of our Philadelphia mortgage company can give you advice and help you decide if tying up extra cash in your home is a good move.
6. Keep An Eye on Current Interest Rates
Interest rates fluctuate, and timing can be everything. Even a slight change in the interest rate you get for your home loan can translate to big savings over the length of your loan term. Our experienced team of Philadelphia mortgage brokers keeps an eye on the latest market trends and can give you advice on when the right time to submit your loan application is so you get the best rates.
7. Do Not Forget Additional Costs
When calculating the cost of a new home, do not forget about those added costs like closing costs, property taxes, homeowner’s insurance, mortgage insurance or HOA fees. These extra costs can add up and should be included in your budget so you can easily afford your monthly bills.
With our custom digital quotes, you will have a clear idea of how much your mortgage payment will be every month. We want to help make your dream home affordable and ensure you are making informed financial decisions.
8. Read the Fine Print
Once you have found the best loan program for you, we encourage you to get a deep understanding of all the terms and details of the mortgage. What are the individual mortgage terms, the fees, the penalties, and overall cost over the entire period of the loan?
Our team will walk you through the entire home-buying process and help you understand the complexities and fine print of your mortgage agreement. You will feel confident signing on the dotted line at the closing table!
9. Maintain Your Financial Stability
During the loan processing period, it is important to keep your finances stable. One of the biggest mistakes we see clients make is switching jobs, making big purchases or taking any actions that could impact your credit score or financial situation. Mortgage lenders will double-check your information right before closing the loan, and any significant changes could result in your mortgage approval getting rejected.
10. Work With Philadelphia Mortgage Brokers
As you go through the home purchase loan process, working closely with a Penn Street Mortgage broker can help make the process stress-free and straightforward. We work hard to understand your unique mortgage needs and are here to guide you throughout the entire home-buying process. We are here to prioritize your best interests — not just during the loan process but even after your loan has closed.
Penn Street Mortgage | Your Local Philadelphia Mortgage Company
With the expert guidance of a Philadelphia mortgage broker at Penn Street Mortgage, you can find the perfect home loan and make your home dreams become a reality.
If you are ready to take the next steps in the home-buying process, give our team a call. We would love to help you get pre-approved and answer your questions about getting a mortgage in Philadelphia, PA and the surrounding area!
