5 Tips for Houston Investors Considering a Traditional Mortgage
Rates for traditional mortgages are at historical lows. Many buyers have been motivated to buy to take advantage of these rates before they start working their way back up. Houston real estate investors in particular looking for a good deal are starting to take advantage of securing traditional mortgages to purchase their properties with.
While this seems like it should be a relatively simple process, there are a few things that you need to consider before going this route.
Check Your Credit
Your credit score and report will come into play regardless of the type of loan that you are applying for. You should check your credit report far before you are ready to make an offer on a Houston investment property.
Errors on credit reports are unfortunately not uncommon and need to be corrected. It can be time consuming to improve your credit, or remove errors, and you need to get started as soon as possible. Even the slightest difference in your credit score could be the difference in being approved, and scoring the best rate.
Have Your Down Payment Ready
If you are used to the rules for investment loans, this consideration could catch you off guard. When applying for a traditional mortgage, lenders typically require that the down payment be in your personal account for at least 60 days. This helps show that the funds are there, you worked to receive them, and it makes the documentation much easier and faster.
Reduce Your Debt
When looking at your credit report your payment history is the first thing that lenders look at, followed closely by the percentage of your credit that you are using. Lenders like to see that you are not keeping your balances close to the limit on your accounts.
If you have maxed out your accounts it is important to start paying down your credit accounts as quickly as possible.
Keep Track of Your Bank Statements
Lenders will want to see several months of your bank statements. If you are an investor that is self-employed this is even more important. You need to carefully track and show what your credits and debits are for on your account. Your lender will need to see where your money is coming from to be able to verify your income.
If you have any questions on this go over your bank statements with your lender to accurately understand what they are going to want to see when trying to approve your loan.
Search for a Lender
While there are only a limited number of programs available for lenders to use when purchasing a property you want to shop around to find the best one for you. Never work with the first lender that you talk to. The rule of thumb is that you should speak to at least 3 lenders before making a decision on who to use.
While some people think Houston real estate investors need to have cash to get started that is entirely not true. There are programs available that lenders can qualify for. With rates at all-time lows now is a great time to make a Houston real estate purchase through obtaining a mortgage.