Mortgages are terrifying. The idea of being committed to a payment for the next 30 years is a viscerally horrifying concept—which makes it a perfect topic to visit this season. Here is what you need to know about applying for a mortgage in the tail end of 2020.
Firstly, it’s important to understand that while mortgage rates are currently low—the last 3 weeks have seen interest rates dip well below three percent—that doesn’t mean you can expect the lowest possible rate. There are a lot of factors that play into the mortgage rate you receive: Credit, location, estimated value, and even your occupation. For this reason, you should evaluate your own eligibility so you know how “safe” you are before calling your bank.
You should also know that your credit history—while always important—will play even more of a role if you plan on buying any time soon. In the absence of other economic factors, lenders are looking much more closely at debt in comparison to income, and some lenders reserve the right to ask applicants to reduce or eliminate sources of debt before granting a loan.
Another aspect of the loan application process involves extremely timely employment checks—some of which may seem invasive. It isn’t out of the ordinary for lenders to vet applicants’ job stability, including whether or not the job will subject workers to increased risk of contracting COVID; for now, at least, a higher-risk opportunity for you might lead to a more tenuous standing in lenders’ eyes.
Finally, most experts in the loan field agree that helping your loan service help you is a crucial aspect of getting information quickly and accurately—something that is of paramount importance these days. The best way to do this is simply for you to be available to the best of your ability; the quicker you can respond with the necessary information, the faster your selected lender will be able to move you through the application process and get you a quote.
Everything feels uncertain right now, and the real estate field isn’t exempt from that feeling. By following the information here, you can cut back on your own uncertainty—and, in the process, potentially score a decent rate on a mortgage.