9 Tips to Help Women Home Buyers Get Mortgage Approval

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Single women make up 21 percent of all home buyers. Don’t let anyone tell you just because you’re a single woman that you should hold off on having a house until you have a partner at your side. If you’re ready to take the next major step in your life and buy your first home there’s no reason you shouldn’t take the leap and go for it even with a few hurdles to get over. Before you start the process, here are nine tips to help women home buyers with the mortgage approval process.

Gather your proof of income

To begin you will need to have your last few pay stubs to prove how much you make and that you have a steady income.  If you’re self-employed you will need to provide tax returns from the past two years. If you have other types of income, such as disability or social security, you’ll need statements showing how much you receive each month.

Don’t quit your day job

Hold off on quitting your job until after you’ve signed on the dotted line. Quitting your job close to applying for a mortgage could prove disastrous, especially if you already started the application process. They’re likely going to put a hold on the application until you have a new job and can provide updated pay information.

Check your credit score

Before you even go forward with the process, check your credit score. Your credit score plays a big part in the mortgage rates that you will receive.  It’s not saying you can’t get a mortgage if your score isn’t great, but it won’t help. If the number is too low, you might want to consider waiting.

Improve your credit score

Improve your credit score before applying for a mortgage. For example, start paying down your credit cards, pay your bills on time, try to get late payments erased from your credit card accounts, and dispute any negative marks on your credit report. Once you get your number up to where you’re satisfied, you can move forward. Also, talk to your mortgage lender about doing a rapid rescore, which is a way to quickly fix your credit score in a few days rather than in weeks or months. It can allow you to get a much better loan than going without it.

Avoid applying for other loans

Don’t apply for any loans that require a credit check during, and for at least six months before you begin the mortgage process. For example, stay away from car loans and new credit card applications. You may think having the additional credit will help you, but it can actually hurt your chances at being approved.

Pay down your debt

Start working on settling your debt, even if you call the companies and ask to lower your interest rate, set a more affordable payment plan, or pay off the debts all together. Your debt can weigh down your credit score, especially if you have unpaid bills that are close to going to collection. Once they go, there’s no turning back. Paying your debt down can help you improve your debt-to-income ratio, which is one thing lenders look at when making a decision about the loan. The lower the number is, the better.

Do your research

It’s important to do your research, and your first step should be to ask your loved ones for personal references. As easy as it may seem to pick any mortgage lender, it’s about choosing one that’s right for you. Talking to at least a few is your best bet that way you have plenty of options to work with. Next up is to compare rates, read up on the companies, and as always, trust your gut. Some may try to take advantage of you because you’re a woman, but when you trust yourself and your research, you can find the best mortgage lender.

Be realistic

Be realistic during the mortgage process. If your credit score isn’t stellar, you can’t expect to get low interest rates. You have to be prepared for anything. The better your credit score is, the more of a chance you have of getting an interest rate you can work with, and the more realistic you are, the less you’ll be disappointed.

Have a co-signer

You may want to get a mortgage on your own, but if you don’t have a lot of equity and don’t have great credit, your best bet might be to get a co-signer.  The cosigner will be responsible for repaying the loan if you default, but has no rights to the home. A mortgage lender will look at all the same information they look at when assessing your qualifications – income, credit score, etc.

Make a large down payment

Save up a big down payment before you start the mortgage process. The bigger the down payment, the better. Your payments every month will be lower and you can get a lower interest rate among other benefits.  As an added benefit for those who put down 20% or more you won’t be stuck paying for private mortgage insurance.

Don’t bundle closing costs

While some people might be a fan of bundling the closing costs into the mortgage, doing so can actually cost you more than you think.  There are many who believe the process adds extra costs that go unnoticed.  A review by a University of Iowa law professor showed that lenders would overcharge individuals nearly 50% of the time.

Wait for the right time

Waiting for the right time can be a much better option than running right out to apply for a mortgage. Are you thinking of changing jobs, have a low credit score, or have a good amount of debt? Consider waiting it out until your financial situation is a little bit more calm.

Final thoughts

Avoid any naysayers who tell you to wait to apply for a mortgage simply because you’re a woman. If you want to buy a home, you should. Take time with the process and do things the right way. Don’t let all the steps and warnings deter you, however, you should still be cautious. Make sure you also check on how to keep yourself safe from mortgage fraud, and before long, you can have the home you always wanted.

Looking to buy or refinance a home? Inzopa can help save you time and money.

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  • Ed Feather

    Good stuff, but a thought on making a “Large Down Payment” (DP). Saving 20% for a DP isn’t easy and the trade-off of waiting until you can could cost you as much or more, in terms of a higher interest rate, for the life of the loan. Time was with only a small DP (>3.5%) meant going FHA with a large Up Front Insurance Premium. Today’s lenders are more willing to take a 97% Loan-to-Value (LTV) and offer Private Mortgage Insurance which can be dropped after you get your LTV below 80%. Just a thought, because you never know when you’ll find ‘the right house’. Ed Feather (NMLS#1055536)

    • Inzopa

      Your point is well taken.

      We have had financially savvy home buyers with down payments below 20% shy away from FHA loans due to high monthly insurance premium.

      However, Inzopa has lenders who are providing a second private mortgage whose payments equal the insurance premium. The financially savvy consumers prefer this option as the interest part of the payment is tax deductible.

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