You’ve decided that you would like to purchase a beachfront home in Bandon, Oregon, now what? Before you even start looking at homes in the area, you should apply for a mortgage so that you will know what kind of home you can afford. While buying a house is already stressful, the following are some tips to help you to prepare and educate yourself on to get your Oregon mortgage loan approved.

oregon mortgageKnow Your Credit Score

You should never assume that your credit will be good enough to be approved for a mortgage. All it takes is a matter of minutes to run your credit report and get it sent to you. You never know, you could have been the victim of identity theft, and you wouldn’t have found out had did not run your credit score. Two things that will stop a mortgage application dead in its tracks are low credit or any appearance of credit fraud.

Pay Bills and Fix Errors

Not only are there high credit score requirements, but if you have more than one missed or late payment, combined with other dings against your credit score, you will find that these things could also stop the mortgage approval process. By doing simple things, such as paying your bills on time and decreasing the total amount of debt you have, can help you to increase your credit score. You should also see if you can fix  other types of errors on your credit score to help expedite the mortgage application process.

Put Away For a Down Payment

The requirements for acquiring a mortgage loan are constantly changing, but it is always a good idea to have some cash on hand to make a down payment. At one point, mortgage lenders were willing to approve mortgages loans with no down payment. Since the financial collapse of 2008, they have become much more cautious. There are many lenders who will turn you away if you have no cash to put down on the house.

Consider Closing Costs and More

The average lender will expect you to put down at least 3 percent, except for the Federal Housing Administration, which requires 3.5 percent down. The ideal percentage to put down on a mortgage is 20 percent of the home’s asking price.A few other expenses you should be thinking about when purchasing a house include credit report fees, closing costs, inspection costs and title searches, among other things. Closing costs are going to most likely be the biggest expense in that list because they are between 3 to 5 percent of the balance of the mortgage.

Pay Off Your Debt and Avoid New Debt

While you do not need a zero balance on your credit cards to qualify for a mortgage loan, the less you owe to creditors, the better, when it comes to the mortgage process. If you are someone who carries a lot of credit card debt, your lender might offer a lower mortgage or even turn you away. As a rule of thumb, your entire monthly debt repayments should not exceed 36 percent of your gross monthly income.

Avoid Major Purchases Until After the Closing

Lenders will recheck your credit before closing. If it shows a lot of new debts, you could potentially be denied your mortgage at closing. You should avoid making major purchases until closing on your mortgage loan. This includes anything from financing a new car, purchasing home appliances on your credit card or co-signing someone else’s loan.

Get Pre-approved

Don’t rush into the house-hunting process without getting pre-approved for a mortgage. Overall, it helps you to understand exactly how much you can spend on a home by telling you how much you qualify to borrow for a home purchase. This will help you to understand exactly what price range you can look at without falling for a house that is definitely outside of your budget.

The Letter Is The First Step

If you are pre-approved by your lender, then you will receive a letter for your records that lists exactly for how much money you have been approved. The letter also indicates the interest rate you will pay. The amount listed in the letter could be released to you as soon as the seller accepts your bid.

Choosing the Right Lender

Like any big purchase in your life, you should really shop around before signing with a mortgage lender to buy your dream Bandon Oregon real estate.

Each Situation Is Unique

It is not only about the interest rates. You should look for a mortgage lender who will be the best fit for your financial situation. Plan on getting quotes from several lenders and ask questions to see why you should go to them for your mortgage needs.

If you did not qualify for a mortgage loan, do not get discouraged. Try to use the failed attempt at securing a mortgage loan as a learning experience to help you understand what you can improve before you apply again.

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