Top 10 things Philadelphia home buyers should know

Living in Philadelphia and ready to finance your dream home? Buying a home is one of the most vital financial moves you will make in a lifetime. Here are 10 things you should know while seeking a mortgage:

1. Your credit score is vital. Before applying for a mortgage, get a recent copy of your credit report. If you have a low credit score, there are several things you could do to boost it, for example, you could close down your inactive credit card accounts.

2. Make a budget. Before applying for a mortgage, do a budget detailing the amount you need to buy the property and cover the related costs and fees. Always remember that the repayments will depend on the amount you borrow and the interest charged.

3. You’ll be better off avoiding frequent job changes. A number of lenders will prefer to lend to individuals who have been with an employer for a considerable time as an indicator of stable income and thereby a predictable ability to repay. If you are contemplating switching jobs, it is advisable to hang on to your current job until after you have taken the mortgage.

4. Significant unpaid debts can derail you. Lenders are skeptical about mortgage seekers with a whole lot of debts around. Before you apply for a mortgage, cut your credit card debts and pay off student loan in time to demonstrate your ability to manage money responsibly. Your mortgage application is more likely to succeed if you have less debt.

5. You will need proof of income before getting a mortgage. Mortgage lenders will need proof of how much you earn annually and a summary of how much tax is deducted. Also, ready your banking statements and pay-slips so that the lender can know how much you earn.

6. If you are self-employed, you also need to provide your income source. For self-employed people, lenders will want to be sure that you can keep up with the repayments. Here, you will need to avail your account statements detailing your financial position in the recent past.

7. Bigger deposits are a plus. The more the deposit you have, the larger the choices of mortgage that will be available to you. Most Philadelphia lenders reserve their best rates for clients with hefty deposits.

8. Buying with your spouse with a good credit score can boost your prospects. If you have a low credit score or you have no mean of coming up with the required down payment, you can consider applying for the mortgage together, with your spouse as the co-borrower (when the new home will be the primary residence for both). This can boost your chances of getting a mortgage especially if the other person has a strong credit history devoid of any delinquencies and a strong ability to repay the mortgage. However, this is a big commitment, and you may want to sit down with the other person to work out the specifics.

9. Do not alter your application. Once you have made your application, do not try to change any figures that could hold up your home purchase.

10. It is okay to get some help. If you are struggling to zero down on the perfect mortgage deal, or you are not sure of how much you need to borrow, you can enlist the services of a professional mortgage broker. They can conduct good market research for you and help you out with your application process. Getting the right mortgage is not a walk in the park, however, with the right advice and working with the right people, you can get the ideal mortgage to help finance your dream home.

For Philadelphia residents, there are several valuable resources available including the Pennsylvania Housing Finance Agency and Clarifi. We offer in-person, online and over-the-phone mortgage consultations from licensed mortgage loan officers. Take the first step in getting prequalified for a mortgage and save on your mortgage, reach out to STEM Lending’s mortgage team today:

• E-mail: help@stemlending.com
• Direct Message: stemlending.com/contact-us
• Call: (833) 600-0490 (Toll Free)