Sometimes the best information regarding real estate is in the Saturday editions of the Seattle Times, rather than Sunday. This week there were two helpful articles, one for owners with adjustable rate mortgages and one for prospective buyers providing tips on getting ready to apply for a new mortgage.
If you have an ARM that is poised to reset it is important to know exactly what the terms are. What is the index referenced in your loan? What is the adjustment differential? What is adjustment cap? what is the lifetime cap? If these terms are a little vague to you, you might be in denial about where your mortgage, and you, are headed. Read the linked article from the The Mortgage Professor to know what to do.
If you are getting ready to buy a home there are some key moves you need to make first.
1. Check your credit report before making loan application. The percentage of errors on credit reports is shocking. Better to get those errors corrected PRIOR to making application for a new loan.
2. Pay down unsecured debt i.e., credit cards. They weigh heavily against your creditworthiness.
3. But do not pay off and close an existing home equity line of credit [“HELOC”]. It doesn’t drag down your credit like credit cards, and could be a helpful resource when it comes to the myriad of associated moving costs, even the earnest money deposit for your new purchase.
4. Changing Jobs. If you must change jobs, make certain that it is in the same line of work, hopefully for better pay and/or position.
Read the article to get the entire picture on the best moves to make in preparing for a home purchase, whether you are moving up or it is your first home.
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