How financial planners can help their clients to qualify for a mortgage
Buying a home is the largest purchase that most of us will ever make, and it’s not one that should be taken lightly. Working with a financial planner can help make this daunting task seem doable by giving you a roadmap to work from.
One of the biggest ways financial planners help their clients is in the mortgage qualification process. Here are some of the ways they can do that:
Understand Debt to Income Ratio
A financial planner can help you make sense of how much you can realistically afford each month based on your existing debt and other monthly expenses. It’s helpful to have this conversation and know where things stand before you start looking at homes. Otherwise, you might fall in love with a house that you can’t realistically afford and end up on the path to default or foreclosure.
Down Payment Saving Strategies
As home values continue to rise, putting 20 percent — or even 10 percent — down on a home seems like a daunting task. But, putting in a little extra cash up front can help you avoid paying private mortgage insurance as part of your loan.
A financial planner will assess your income and expenses and help you determine how much you can realistically save each month. Once you know that, you can determine how long it will take to amass a down payment and when you will be ready to begin the mortgage qualification process.
Credit Score TLC
Like applying for any loan or line of credit, qualifying for a mortgage requires a check on your credit report. A poor credit score or sketchy credit history could mean the difference between qualifying and not qualifying or between a low interest rate and a high one — so it’s in your interest to put your best financial foot forward.
A financial planner will review your credit reports from all three reporting bureaus and help you address any errors or problems that you uncover. It can be an arduous process, but one that’s well worth it in the end.
by Author, Nov. 07, 2018