4 Tips for Qualifying for a Mortgage Loan in Greater Portland

It’s hard to believe that the holidays are just around the corner!  With this festive season comes a slower paced Greater Portland Real Estate market, which means that now can be an excellent time to buy!  Lack of competition and sellers who are interested in selling quickly can create an ideal home buying scenario.

If you are planning on buying a home Portland, Cumberland or Falmouth this holiday season, you may be doing so because you’ve heard about the current real estate market leaning in the favor of buyers.  However, it is important to be aware of the changes that have taken place this year with qualifying for a home loan.

Lenders have tightened the reigns on who qualifies for a mortgage loan to ensure buyers have the financial stability to hold on to the home.  The past few years in the national housing market have proven that buying within your means is the safest path, and lenders are keeping a close eye on who’s purchasing in today’s market.

As a team Greater Portland Real Estate agents with RE/MAX By the Bay, we wanted to point out four tips that can help you get qualified for a mortgage loan so you can move forward with buying your dream home in Greater Portland!  While there may be a few more hoops to jump through, getting approved and finding the home on the Greater Portland Real Estate market that fits your needs and lifestyle can be a smooth process.

Before beginning your home search, take a few minutes to review these four tips.

-  Have the right credit score- Credit scores are moving to the forefront of being approved for a Greater Portland home loan.  Most lenders are expecting a credit score of 600+ even for FHA loans.  A good credit score will not only help you qualify for a home loan, but can lower your interest rate, which can save you thousands of dollars in the long run.

-  Shop around- The interest rate is important, but there are other costs to consider such as discount points and even the type of mortgage loan. When shopping for best rates, compare various combinations of discount points and loan types. Your Greater Portland Real Estate agent can help you decide on the best option.

-  Know your borrowing limit- If you’re not sure how much you want to borrow, a good rule of thumb is to look at the Federal Housing Administration requirements.  FHA will limit mortgage payments at 31% of gross monthly income before taxes for most buyers.  This can help ensure that you’re not getting in too far over your head.  If we’ve learned anything over the past few years, it’s to play it safe in the housing market.

-  Consider a No-Closing-Cost Loan- If you have positive equity, but are lower on cash up front, you do have an option to choose a no-closing cost loan.  This simply means that you’ll have a slightly higher rate, but the closing costs will be paid over time instead of up front.

As always, we’re here to help!  If you have any questions about qualifying for a mortgage loan, living in Greater Portland, are ready to put your home on the market or are ready to begin your home search; please contact us!  We’d love to put our experience to work for you!

Have a Happy Thanksgiving!

The David Banks Team
RE/MAX By the Bay

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