A Few Ways Debt Affects Your Mortgage

If you are looking into financing a home at the Lake of the Ozarks, you’ve surely heard about how your credit score can impact your purchase. Many factors will play a role in your home buying endeavors, but one that you may not have thought about is your debt to income ratio. This one little aspect can play a huge role in your home-buying plans, so it makes sense to take a few moments to evaluate it. Here are a few things you may want to know about debt and mortgages and how they work together.

What is Your Debt-To-Income Ratio?

When determining what your debt to income ratio is, you can quickly do the math and come to your own conclusion. You will add up all of your monthly payments including credit cards, personal loans, and current mortgages. You can then divide that number by your gross monthly income. This resulting number is your debt to income ratio, and it will help your Missouri lender determine if you can afford another debt payment each month. An ideal debt to income ratio would be 25% or less, and if your debt to income ratio is above 43% you may need to wait a little longer to buy a home and spend some time paying off your current debt.

Unsecured & Secured Debt

Did you know that there are different types of debt? In fact, some can actually show that you are reliable while others may hurt your chances of securing your mortgage. The two main types are secured and unsecured. Here are a few details about these types of debts and why you may or may not want them.

Unsecured

Credit card debt is considered unsecured debt and can be detrimental to your scores if your current balance is more the 50% of your available credit limit. That means nothing is backing it, you can’t trade anything in or foreclose on it. It’s debt that is not secured to an item. Student loan debt is also considered unsecured, but it isn’t necessarily bad if you are consistently paying your bills on time. In many cases, student loans can even help raise your score. However, other loans like personal loans or credit card debt, even when paid on time, can still lower your score.

Secured Debt

Secured loans include auto loans, mortgages, or any loan that is balanced against something that could get taken away. There are some cases where auto loans can raise your credit score by diversifying the type of debts you have. Sometimes an auto loan can also be viewed more favorably than credit card debt because auto loans are harder to obtain than credit cards. Did you know that mortgage payments can also look good on your credit report? As long as they have been paid on time, that is. If you were ever late on a payment, that can look like a risk to a new lender.

If you're concerned with how your debt will affect your chances of obtaining a home loan at the Lake of the Ozarks, give us a call at 573-746-7211. We can discuss your questions and concerns, go over your financing options, offer competitive interest rates, and back it up with the first-class service you deserve. Together, we'll work towards getting you into that dream home of yours!

For Lake area news, resources and tips on financial services, please 

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

Tips to Help Speed Up the Mortgage Process

The mortgage process can often feel like a long and daunting event, but it doesn’t have to be. While there are always aspects of the mortgage process that can’t be controlled, there are so many things that you can set the pace for. Team Lasson wants to help you purchase your Lake of the Ozarks Vacation home, and we want to help you get everything in order as fast as possible. This real estate market has been busy, to say the least, so anything that you can do to help speed it up on your end is going to be very helpful.

Gather Your Documents

This is one of the first things you can do to get a head start and help speed up the mortgage process. Getting your loan approved will require a series of documents, and if you have them ready at a moment's notice, the pre-approval process will be much smoother and faster. Here are a few documents that you will want to dig out of your files.

Personal Information:

• Social Security Number
• Date of Birth
• Current driver’s license or photo ID
• Current and previous addresses (two year history)
• Names and information of any co-signers or co-borrowers

Income & Employment Information:

• Most recent two years W-2
• Current paycheck stub reflecting a year-to-date income of 30 days or more.
• Present employer’s name, address, and phone number. Length of employment, position, and salary. If employed less than two years, please provide a previous employer’s name, address, and phone number to cover two consecutive years. Exact dates are required.
• Last two months’ bank statements for all accounts. Please provide explanations of any deposits larger than a normal paycheck and please include all pages, even if blank.
• If self-employed or paid any commission or have any business income, please provide complete copies of your federal tax returns along with all schedules and W-2s for the past two years. Include corporate or partnership returns, if applicable, for your business. Also, include a year-to-date Profit & Loss statement.
• Verification of other income needed to qualify, such as retirement, rental, interest, or dividend income. If receiving Social Security or pension income, you will need to provide the current award letters.

Get Pre-Approved

This can speed up your mortgage process exponentially. When you have a pre-approval letter in your hand while house hunting, you are essentially saying “this is how much my lender is willing to lend me right now.” This means that your lender has reviewed your information and has decided that you would be approved based on some initial basic information about your financial status. You can apply for this pre-approval on our website (www.YourLakeLoan.com), and while we are a mortgage company based out of Lake of the Ozarks, we can assist you anywhere across the country with your next mortgage.

Finalize Negotiations Quickly

This will be done with your real estate agent, but it can really slow down the buying process if both parties aren’t communicating quickly. There will be a variety of negotiations that happen between the buyer and seller, and as you get these notifications from your agent, it’s important to respond quickly and not let these things sit around for too long. Properties are selling quickly these days, and it’s important to keep this process moving - there are plenty of other buyers ready to swoop in.

Schedule the Inspections

Your home will require a variety of inspections. If you schedule these well in advance of the closing date, you are giving yourself plenty of time to react to these inspections.

Avoid These Slow Downs

There are a few things you can do that will really slow down the mortgage process. If at all possible refrain from doing any of these things while purchasing a home:

• Changing jobs
• Applying for new credit cards
• Changing bank accounts
• Missing payments or bouncing checks
• Transferring money within your accounts
• Make large deposits
• Co-sign on any new accounts
• Pay off or close debts

Don’t Forget to Stay In Touch

When you are in the process of purchasing a home, one of the most important things you can do is stay in touch with your mortgage lender at Lake of the Ozarks. We want to help you close on this home as quickly as possible, but if there are delays in communication, this can slow things down.

If you are ready to buy a home at Lake of the Ozarks, we are ready to assist! This has been an amazing time to buy and refinance homes - and if you are looking for a good rate, it may be worth it to do it now. You can visit our website to submit an application or learn more about our company, we look forward to working with you, and helping you close as fast as possible!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

4 Mortgage Myths Debunked

The mortgage industry can be complicated. There are a lot of myths and misconceptions surrounding the process of obtaining a mortgage at the Lake of the Ozarks. In today's blog, the best mortgage lender in Osage Beach is here to offer the truth behind some of those common myths you've likely heard.

1. You Have to Have a 20% Down Payment. 

Probably the biggest myth about mortgage loans is that you have to put 20% down. While this figure was typical in the past, some programs now allow for as little as 0% down. The minimum amount for your down payment will vary by lender and loan program. The only thing to keep in mind is that when you put less than 20% down, you will be required to pay private mortgage insurance. In addition, the more you're able to put down upfront, the better deal you'll be able to get and the more money you can save in the long haul. You will also start out with more equity in your home.

2. You Have to Have Good Credit to Purchase a Home. 

The other myth that you hear a lot is that you can't purchase a home if you have a low credit score. While this is not true at all, it is true that a good credit score will get you better rates. There are programs available to assist buyers with low credit scores, however, the interest rates on those programs are going to be higher. You also may be able to offset the negative factor of a low credit score by offering up a larger down payment or meeting other qualifications. For most people, credit alone is not a show stopper when purchasing a home.

3. Once You're Pre-Qualified, You're Set on Your Loan. 

Many people don't understand the differences between a pre-qualification, a pre-approval and a mortgage approval. Being pre-qualified for a certain amount does not mean that you will be approved for a loan in that amount. A pre-qualification is a simple process that gives you a crude estimate of how much you might qualify for in a mortgage. A pre-approval is a much better indication of how much you'll qualify for and even what type of interest rate you will be offered, because your file is actually reviewed by an underwriter prior to you finding a property.

4. Your Interest Rate Reflects the Cost of Your Mortgage. 

While you obviously want to get a low interest rate on your mortgage, the interest rate isn't the only number to be concerned with. All mortgages have other fees that are rolled into the cost of your loan. These fees are reflected in the APR. Don't get caught up on the lowest interest rate, because a loan option with a slightly higher interest rate, but a lower APR, is going to be the better deal. When comparing loan options and lenders, you'll want to compare the APR, not the interest rate.

As your Lake of the Ozarks mortgage lender, I'm here to help you understand the mortgage process. I'll discuss your Lake of the Ozarks home financing needs, offer competitive interest rates and back it up with the first-class service you deserve. Give me a call today at 573-746-7211 to get started on your mortgage approval today!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.