The Mortgage Bankers Association (MBA) reported that mortgage applications surge amid record-low rates. In a press statement released last Wednesday, MBA said that mortgage applications increased 23.1 percent from one week earlier.
Freddie Mac Senior Vice President Paul Mullings, in his blog, wrote, “Mortgage rates are at 50-year lows – the 30-year fixed-rate mortgage averaged 3.95 percent at the close of 2011 – making homeownership more affordable than ever for families with a stable income and good credit.”
Before you begin house hunting, Mullings said that it is essential that you get the facts about buying a home in light with today’s housing market.
There are some “rules of the road” that a would-be homebuyer – this includes first time buyer, second time buyer, or third time buyer – needs to understand, the senior vice president of Freddie Mac said.
Here are the four essential first steps or “rules of the road” before seriously thinking about buying a home, according to Mullings:
• Find out your current credit history and score. You don’t want any surprises down the road. If you have no credit history, or have had credit problems in the past, there are steps you can take to build, improve, and maintain strong credit.
• Start gathering all of your documentation. Responsible lenders today will want documentation verifying your income (W-2 forms, tax returns, employment records), credit history, and assets (such as bank statements to verify your savings).
• Consult with your lender to review your income, expenses, and financial goals to determine the type and amount of mortgage you qualify for. One important question you’ll need to answer is whether you’re better off with a fixed-rate mortgage – where you lock in the interest rate for the life of the loan – or an adjustable rate mortgage in which the interest rate changes. While fixed-rate mortgages are by far the most popular choice, you need to know your options.
• Talk to your lender about applying for a mortgage and getting a pre-approval letter. This letter provides an estimate of what you might be able to borrow – provided your financial status doesn’t change – and demonstrates to home sellers that you’re a serious buyer.
Whether you are a first time buyer, first time seller, empty nester, thinking about selling or buying a home, do contact the Guldi Real Estate Group. In Southern Maryland, the Guldi Real Estate Group is the number one real estate team.