Can You Get a Mortgage for Your Daytona Beach Property Purchase?
Many people are wondering if they can even get a mortgage if they want to purchase a new home. Like many places, in the country, the Daytona Beach real estate market is full of great home values and now may be the best time to buy for a long time to come. There’s a lot of talk about how difficult it is to get a mortgage right now. Well, it is much more difficult than during the days of the “liar loans,” but you can get a loan, at a very good rate if you consider 4 things:
- Your Credit is Good
- Your Debt to Income Ratio is acceptable
- Your Income can be verified
- Good Down Payment
These are general guidelines and each individual case will be different, so your best bet is to get pre-qualified for a mortgage loan before even looking at homes and condos. Remember, lenders vary in requirements. Try a couple of times, with different lenders, if you are not qualified on the first attempt.
Good Credit is Needed to Buy Daytona Beach Homes
The target score that I’ve seen is above 650 and this will not be good enough is the debt to income ratio is to high. If your score is lower, you may have trouble, and you may want to look at raising your score for better terms before buying. First, get your credit report and find out your score. If it’s 760 or over, your in a great position. If it’s lower you will most likely pay more interest. If you need to boost your score, the quickest ways are:
- Get any errors off the report. Go through the credit reporting agency process to remove bills that are not yours, bills that are paid off, and anything that’s wrong.
- Pay down your credit cards over a few month period. You will be improving your credit score and lowering your debt to income ratio.
- Pay all your bills on time. Don’t use the grace period.
- Don’t take out any new debt
Debt to Income Ratio
This number has become much more important recently. Your debt should be no more than 36% of your gross income. This number includes your housing cost which should not exceed 28%. Of course, if your ratios are lower, you are in better shape to qualify and for better rates.
Your Income Must Be Verified
The days of liar loans, where income was not verified, or stated income loans were made, are over. You will need to provide proof of income in the form of pay statements or tax returns.
Down Payments Can Change the Rules
Higher down payments help. A higher down payment means less borrowed money that help with the debt to income ratios. Lenders offer better terms with higher down payments as well.
You Can Buy Daytona Beach Property
Lenders are very conservative and licking their wounds. Still, every lender is different and you need to shop around particularly to get the best rate. If you are qualified, don’t think than lenders are doing you a favor by lending you money. Rates will vary based on the standards of the lender. One lender may charge less interest at a 680 credit score than others. Shop Around!
Lenders are lending. If you’re qualified, you can get a loan. One word of caution – ARMs. I advise avoiding Adjustable Rate Mortgages in this economic environment. There is a potential for increased interest rates based on inflationary pressures from energy and food costs and the weakened dollar. Please be very careful with these loans you don’t want to get caught paying too much in the long term for small savings now.