Real Estate Talking Points

Talking Points

• Understanding the mortgage process and meeting lenders’ more stringent qualification requirements have become big obstacles for applicants, according to a survey by MortgageMatch.com.  More than 70 percent of recent buyers surveyed described the mortgage approval process as more difficult than they expected.
  
• A vice president at Move.com offers borrowers the following steps to take prior to applying for a mortgage:
  
• Pay down debt: Reducing total debt – including monthly payments on cars, student loans, and credit cards – leads to a reduction in the total debt-to-income ratio, thereby improving the borrower’s credit score.
  
• Clean up credit: Borrowers are advised to obtain free credit reports from each of the three credit bureaus (Equifax, Experian, and TransUnion) and carefully review them, noting all negative items.
  
• Delay large purchases: Lenders check credit reports at the time a borrower applies for a mortgage, and again before closing.  A last-minute spending spree will raise red flags.
  
• Increase the down payment: Increasing the size of the down payment reduces the loan-to-value ratio and improves the borrower’s chances of being approved for a loan.
  
• Gather paperwork: Lenders will want to see pay stubs, bank statements, assets, credit documents, income tax returns, and all financial statements.