Smith Mountain Lake Real Estate – Debbie Shelton

What is Mortgage Pre-Approval?

If buying a new home is on your holiday wish list, then adding a mortgage pre-approval is a must. A mortgage pre-approval, also known as a credit approval, is a loan that has been approved by the financial institution (bank, mortgage lender, or credit union, for example.) This means that all of the criteria that is needed for a loan (credit check, income verification, etc.) have been successfully submitted and the applicant has been approved for a specific amount of money.

 

Why is Getting Pre-Approved Important?

Getting a loan approval allows you to know how much home you can afford. It also shows the buyers that you’re serious about making the purchase. Plus, once you find a home that you’d like to place an offer on, you’re already ahead of the game by having that pre-approval.

 

How Do I Get Pre-Approved?

Getting pre-approved for a mortgage loan is easy. First you have to choose a financial institution for your home loan. This can be your bank, a mortgage lender, or a credit union. Once you’ve found a lender that you like, simply speak to a member of their team to get started. You’ll need to provide specific collateral, such as bank statements, proof of residence, and tax returns.

 

What if I Can’t Get Pre-Approved?

Getting turned down for a loan can be disappointing. But instead of throwing your hands up in the air in despair, take the time to work on repairing your credit score. For tips on how to improve your credit, read this.

Keep Your Home Safe This Holiday Season

With all of the fervor of the holiday season, it’s easy to push safety to the sidelines. Besides, rules and precaution aren’t nearly as fun as twinkle lights and Christmas cookies. Don’t let the extra stress of the holidays distract you from keeping your loved ones safe. Here are a few tips to help you get started:

Stay Off of Social Media

It’s tempting to brag about your new giant screen smart TV, diamond necklace, or gaming system on social media, but by doing that you’re telling would-be thieves which valuables you have in your home. Also, if you’re posting photos of you relaxing by the beach, then burglars know you’re not at home. Take a hiatus from social media during the holidays and keep your plans private.

Check Your Lights

If you’ve turned your home into a winter wonderland via dozens of colored lights and animatronics, then take the time to ensure that your electronics are free from hazards like frayed cords and broken bulbs. According to the U.S. Fire Administration, December is the deadliest month for electrical fires.

Hide Your Packages

The ease of online shopping has made Christmas shopping a breeze, but leaving your packages on your doorstep makes it easier for thieves as well. Have your packages delivered to your workplace if possible. Another alternative is to invest in a package delivery box or an outdoor security camera.

Tell Your Neighbor

If you’re going out of town, let a trusted neighbor know so that they can keep a lookout on your property. Aside from getting your mail or clearing your driveway of snow, your neighbor can let you know of any suspicious activity.

How Are Credit Scores Determined?

Having a good credit score lets banks and mortgage lenders know that you’re a low-risk investment. Making sure that your credit is in tip-top shape is a must for house hunters. Even though there’s no published algorithm that explains exactly how your score is determined, we do know that certain factors play a definitive role in comprising your score. Here’s a breakdown.

Payment History

When a lender looks at a candidate, they want to know how responsible they are at paying back their debts. If you have a solid history of making payments on time, then a lender feels confident that you’ll pay them back as well. Having a series of delinquent accounts presents a red flag, so making your payments on-time is an important factor in determining your score.

 

Length of Credit History

Your credit history details how long you’ve had open credit accounts. Lenders and creditors like see if you have a history of making payments on time. Another factor is how long you’ve had your newest card. If you’re constantly opening new credit cards and carrying a balance on them, you may be viewed as unstable.

 

Hard Inquiries

A hard inquiry is when a lender checks your credit after you have applied for a new account. An example would be applying for an in-store credit card. Having too many hard inquiries will have a negative impact on your credit score.

 

Used Credit vs. Available Credit

If you have three credit cards and they are all maxed out, then your credit score will be negatively impacted. Lenders want to see that you can use credit responsibly and pay off the balance.