Taking out a loan can be a daunting, overwhelming process. Many prospective buyers have serious mortgage fears. Here are their top concerns:
Not Qualifying Due To Bad Credit
As we all know, lenders check prospective borrowers’ credit when they apply for a mortgage. Customers with a high credit score, i.e., between 760 and 850, will qualify for the best interest rates. Lower than 650, though, and they will probably require the applicant to take some time to repair their credit before applying again. Having good credit is only one part of the equation; however, customers may not understand that there are other factors that lenders take into consideration.
Inability to Afford a 20% Down Payment
A significant mortgage fear that home buyers have is not having enough money for the down payment. Many people assume that a payment of 20 percent is mandatory to qualify for a mortgage; however, that isn’t true. Borrowers can, alternatively, pay private mortgage insurance (PMI), which ranges from approximately 0.3 percent to 1.15 percent of the mortgage. Paying the 20 percent down payment saves homebuyers money in the long term. It is far from the truth, though, that the down payment can disqualify them from taking out a mortgage.
Having Too Much Debt
Many borrowers worry that having too much debt means that they won’t qualify for a mortgage. According to NerdWallet, the average household with credit card debt has an outstanding balance of nearly $17,000. Student debt is sky-high, with an average of almost $29,000 per borrower. Being in debt does not necessarily mean that he/she won’t qualify for a home loan. What matters is their debt-to-income ratio (DTI). As long as they are below 36%, most lenders will qualify them for a mortgage. If they exceed 36%, though, they can reduce the size of the mortgage to improve their DTI.
A Better Way to Close with BNNServices
Since 2008, BNNServices has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.
Unlike other signing services, BNNServices “touches” each and every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.
Ready to experience the BNNServices difference? Get started today!