Frontier Mortgage is committed to not only providing you with the best rates, but also the best service.
The development of this web site is a testament to that commitment by providing tools and information to allow you to quickly and easily make decisions on financing the purchase of a new home or refinancing your existing one. You can:
- painlessly walk through the loan process without any pressure
- make an educated decision on your specific loan type with or without the assistance of a loan specialist
- discover ways to improve your credit standings learn how to lower your monthly payments through mortgage insurance considerations
- access changing interest rate information
- pre-qualify for a loan apply online or by mail
- calculate and customize your payment plan
- and much more
Let's take a walk through the loan process and learn what credit is, the different loan types available and how to select the right type for you.
Things to Know Before Requesting a Home Loan
Lenders look at certain items before approving a loan.
1. Your current financial situation
- Your gross monthly income - This is your monthly pay before taxes. Lenders will average your income over the last two years if you are self-employed or work off commissions.
- Your New Monthly Payment - The payment that you would be making with your new home loan. This includes taxes and insurance
- Other debt - All of your debt is added up. This will include loan for cars, credit card debt, and any other debt you may have. Most lenders require that no more than 28% of your gross income be used for housing expenses. First-time homebuyers are sometimes allowed a higher percentage that can reach up to 36%
2. Your Credit Standing or History
Lenders need to assess the risk of lending money to you. They do this by looking at your credit history. These can include histories on:
- Apartment or Home Rental Payment
- Credit Cards
- Installment Payments
- Current and Previous Mortgages
- Payments on Revolving Accounts
Many lenders use a type of credit scoring based on FICO (Fair,Isaac, & Company) guidelines. This scoring method, although beginning in the early 1980's, has really grown in popularity since 1994. Your credit score is based on the following factors:
- Payment History
- Late payments, bankruptcy,collections
- Outstanding Debt
- Your current and the ratio of total balances to total credit limits
- Credit History
- This is how long you have had credit
- Pursuit of new credit
- How many times you have applied or established new credit accounts recently
- Types of credit in use
- How many credit cards and other credit accounts or loans you have
Scores may be between 300 and 900 with 660 being the dividing line. A score of 660 or better means that you are most likely a good credit risk. This does not mean that you are not a good credit risk if your credit score is below 660.
What can I do to improve my score or standing?
- Try to always pay your bills on time
- Don't worry, the scoring system takes into account that people miss a payment from time to time
- Also, negative effects on your credit rating are reduced over time
- Fix your credit report
- Get a copy of your credit report and check it for errors. Frontier Mortgage can help you with this
- Keep your credit reasonable without too much cushion
- As a rule, you should keep below 75% of your credit limit while not having too much cushion or available credit. Too much available credit makes you a higher risk
- Keep your requests for credit to a minimum
- An excessive number of requests can be seen as a desperate need for money
3. The Collateral
Is the home you want to buy worth the money you are asking for? When you purchase a home, the home itself is used as collateral. It is important that the lender feel secure about the purchase. The value of your home is determined by an appraisal being performed. A licensed appraiser estimates the value of a home by comparing the home to similar homes that have sold recently in your area.
Frontier Mortgage, 12400 Olive Blvd, Ste 425, St. Louis, Missouri, 63141: Phone: 314-205-2900 Toll Free: 800-456-2900 |
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