St. Louis Mortgage Help

If the last time you applied for a FHA mortgage loan in St. Louis, St. Charles or anywherre in the State of Missouri was several years ago the experience was likely very different from what you will encounter this time around. Borrowers were often easily approved for much higher loan amounts than they were even interested in (or could reasonably afford, but that’s another issue.) In the past few years as the market saw a dramatic increase in loan defaults, falling home values, and a tough economy nationwide, banks and mortgage lenders have become much more picky about who they will lend money to. You might also hear this referred to as “tightening underwriting standards.”

Today, there is more concern that borrowers won’t be able to pay back the loans as agreed. It’s the lender’s responsibility to carefully review the application to make sure it’s not an overly risky loan, and as an FHA loan applicant there’s a lot you can do to help present yourself in the best possible light.

1. Build Up Your Savings
   When reviewing your application the mortgage company will want to see that you have enough in savings not only to cover any downpayment and up front fees you’ll be responsible for, but also to pay a few months of mortgage payments in the event you unexpectedly had to go a few months without a paycheck. There are many methods to help with building your savings and/or reserves is to consider Down Payment Assistance Programs, there are many available in St. Louis, St. Charles, all over Missouri. Also, negotiate seller paid closing costs or lender credit for your closing costs.
2. Pay Attention Your Credit
   You’ll need a higher credit score than in the past in order to qualify for the best mortgage rates available, as the minimum credit score has increased over the past few years leaving fewer home loan options for those with blemished credit histories. If you expect to be applying for a mortgage in the next few months take a look at your credit report and scores so you can see if there are any mistakes being reported. It can take time to clear these up. Be sure to make all payments on time and avoid taking on any new credit. No matter what do not pay off any credit cards, remedy past collections, or really do any 'credit repair' without first consulting with a lender with experience with helping borrowers get credit qualified. Your good intentions can hurt you for months down the road.
3. Apply For A Reasonable Loan Amount
   A key part of your application will be your debt to income ratio, or what percentage of your monthly income is allocated towards your debt payments. FHA guidelines require that a mortgage payment be no more than 31% of a borrower’s monthly income, and that overall debt obligations (including car loans, student loans, credit card payments, etc in addition to mortgage payments) be no more than 43%. A mortgage professional can help you translate these numbers into a loan amount that works for you.
4. Provide All Requested Documentation
   Start gathering the paperwork needed to document your income and assets in advance. Providing it is non-negotiable these days, and if you start compiling bank statements, W-2s, and paystubs early you’ll know if you’re missing something with plenty of time to track it down. Depending on your situation you may also need to provide additional documents such as tax returns, a business license, 12 months of cancelled rent check payments, or divorce paperwork – ask your lender for a list.
5. Be Available During The Loan Process
   You may very well be asked to provide additional information during the review of your loan application. Keep lines of communication open to help keep the process moving along quickly. Let your mortgage professional and real estate agent know the best way to reach you during the day, in the evenings, and on the weekends. If you’ll be travelling or inacessible for a period of time be sure to let everyone involved know so there are no surprises.

My name is Bob Rutledge and I have been a mortgage professional for over 15 years. I specialize in helping first time home buyers get the best mortgage possible through down payment assistance, lender paid closing costs, and knowing FHA mortgages very well.

If you have questions or would like to discuss your situation, possibly get pre-approved please feel free to contact me at any time.