Is It Ever Better to Wait to Take a Mortage?
Buyers occasionally will ask if it’s ever better to wait to take a mortgage. As a lender, the priority is on helping you obtain successful financing to make the property of your dreams a reality. There are a number of different steps that lenders can take to ease the path, from first-time homebuyer programs to veteran’s loans to second chance mortgages. But occasionally there are buyers whose unique situations suggest that waiting even just a few months can put them in a substantially better position to buy.
Dealing with a recent bankruptcy or foreclosure:
It’s still possible to get a loan under the right circumstances if you’ve recently experienced a bankruptcy or foreclosure. However, three things are essential. One is that enough time has elapsed that you’ve had a chance to comply with any conditions of those transactions. The second is that you’ve taken steps to reestablish your credit with smaller purchases, such as car loans, student loans, or credit cards. Each month that you pay your bills on time helps build and reestablish a stronger credit history. Typically, it’s advisable to let at least one year transpire between these types of events and applying for a mortgage. When in doubt, contact a lender to discuss your unique situation.
Addressing credit report issues that can be fixed:
If your credit score is lower than you’d like and it’s due to issues that can be fixed, consider taking those steps before applying for a mortgage. For example, are there errors on your report? Is your score being dragged down by a small bill that slipped through the cracks and landed in collections? Disputing errors and paying off debts can have a big impact on your credit score (and thus, your interest rate) in a short period of time.
Saving a down payment:
In today’s market, having a down payment is a substantial advantage when applying for financing. In most cases, it’s helpful to have at least five percent of the total purchase price. The closer you are to twenty percent, the stronger case you make as a serious buyer. If saving for a few more months or waiting for an end of year bonus or raise will strengthen your financial position, consider planning accordingly.
Anticipating major financial changes:
Sometimes buyers are facing major financial or life changes, such as a divorce or job loss. While these circumstances can’t always be anticipated, sometimes they’re planned for well in advance. If you’re going to be a substantially different financial position that what you’re in today, it may be better to wait until lenders can get a better sense of your true financial picture.
Are you trying to determine whether now is the right time to buy a home or not in Las Vegas? Contact Sydnee Johnson today to arrange for a personalized consultation and discuss whether in your specific circumstances it’s better to wait to take a mortgage. You may be delighted to find out that you’re in a good buying position today!