11
Jul
By First Rate Financial Group
Mortgage Tips

The Impact of Your Employment History on Mortgage Approval

The Impact of Your Employment History on Mortgage ApprovalWhen it comes to applying for a mortgage, lenders take various factors into account to determine your eligibility. One crucial aspect they consider is your employment history. Your employment history provides lenders with valuable insights into your financial stability, income consistency, and ability to repay the loan.

Lenders evaluate your income consistency to ensure that you have a reliable source of funds to cover your mortgage payments. They typically request pay stubs, W-2 forms, and tax returns to verify your income. If you have been in the same job or industry for a considerable period and have a consistent or increasing income, it strengthens your mortgage application. However, if you recently started a new job or have irregular income due to freelancing or self-employment, it may require additional documentation and thorough evaluation by the lender.

Self-Employment Considerations:

If you are self-employed, the mortgage approval process may be slightly different. Self-employed individuals often face more scrutiny as their income can be less predictable compared to those with traditional employment. Lenders typically review your business financial statements, tax returns, and bank statements to assess your income stability and the overall financial health of your business. Providing a history of consistent income, strong financial statements, and a healthy credit score can improve your chances of mortgage approval.

Employment Gaps:

Extended gaps in employment can be a concern for lenders, as they may question your ability to meet your financial obligations. However, not all gaps are viewed negatively. Lenders may be more understanding if you can provide a reasonable explanation for the gap, such as furthering your education, caring for a family member, or recovering from an illness. It’s crucial to provide supporting documentation and demonstrate how you managed your finances during the gap period.

Changing Industries:

Switching careers or industries can be seen as a risk by lenders, as it may imply a learning curve or potential income instability. However, this doesn’t mean that changing industries will automatically disqualify you from getting a mortgage. If you can demonstrate that the change has resulted in an increase in income, improved job prospects, or enhanced skill sets, it can work in your favor. Strong references from your previous and current employers can also help alleviate concerns about the industry switch.

By maintaining a stable employment record, providing proof of consistent income, and addressing any gaps or career changes with supporting documentation, you can strengthen your mortgage application and improve your chances of approval. Remember to consult with a mortgage professional who can guide you through the process and provide personalized advice based on your specific situation.

10
Jul
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – July 10, 2023

What's Ahead For Mortgage Rates This Week - July 10, 2023Last week’s scheduled economic reporting included readings on construction spending, June’s FOMC meeting minutes, and reports on jobs and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also released.

Construction Spending Increased in May

The Commerce Department reported spending for construction rose to 0.90 percent in May as compared to a month-to-month increase of 0.40 percent posted in April. The year-over-year reading showed $1.93 trillion in construction spending in May. April’s data was revised downward from the original reading of 1.20 percent growth to 0.40 percent growth in construction spending.

Readings for construction spending include all phases of government and private construction projects. When construction spending increases. It indicates overall growth in the economy. Year-over-year construction spending was 2.40 percent higher in May.

Private-Sector Job Growth Exceeds Expectations in June

The Commerce  Department reported the largest increase in private-sector job growth since July 2022. 497,000 jobs were added in June 2023, which surpassed analyst expectations of 220,000 jobs added. 267,000 jobs were reported in May’s reading. The increase in available jobs countered forecasts that the Federal Reserve’s recent series of interest rate hikes would slow inflation and dampen economic growth.

The national unemployment rate fell from 3.60 percent from 3.70 percent in May to 3.60 percent in June. In related news, weekly jobless claims rose to 248,000 claims from the previous week’s reading of 236,000 jobless claims filed. Analysts expected a reading of 220,000 claims filed.

Minutes of Federal Reserve Meeting: Fed Holds Federal Rate Range Steady in June

Members of the Federal Reserve’s Federal Open Market Committee voted to hold the Fed’s interest rate range at 5.00 percent to 5.25 percent. Committee members cited the tight labor market and current economic conditions that exceeded expectations. Fed Chair Jerome Powell said that the Fed would likely raise its rate range two more times during 2023. 

Freddie Mac reported higher average mortgage rates last week’s the rate for 30-year fixed-rate mortgages rose by 10 basis points to 6.81 percent. Rates for 15-year fixed-rate mortgages averaged 6.24 percent and 18 basis points higher.

What’s Ahead

This week’s scheduled economic reports include month-to-month and year-over-year readings on consumer inflation; the final monthly reading on consumer sentiment will be released along with weekly readings on mortgage rates and jobless claims.

 

07
Jul
By First Rate Financial Group
Home Mortgage

Concerns To Address When Choosing The Right Mortgage Lender

Concerns To Address When Choosing The Right Mortgage LenderChoosing the right mortgage lender is a crucial decision when you’re considering purchasing a home or refinancing your existing mortgage. With numerous lenders available in the market, it’s important to carefully evaluate your options to ensure you select a lender that suits your needs and financial goals.

Interest Rates and Terms:

One of the primary factors to consider is the interest rate offered by the lender. A lower interest rate can significantly impact your monthly mortgage payments and overall affordability. Compare rates and terms from different lenders to determine the most favorable options for your financial situation.

Lender’s Reputation and Credibility:

When dealing with something as important as a mortgage, it’s crucial to work with a reputable and trustworthy lender. Research the lender’s reputation, read customer reviews, and check if they have any disciplinary actions or complaints lodged against them. Choose a lender with a solid track record, excellent customer service, and a history of fulfilling their commitments.

Loan Programs and Options:

Every borrower has unique financial circumstances, so it’s essential to choose a lender that offers a variety of loan programs and options. Whether you’re a first-time homebuyer, self-employed, or have a less-than-perfect credit score, look for a lender who specializes in providing loans tailored to your specific needs.

Costs and Fees:

Apart from the interest rate, it’s important to consider the various costs and fees associated with the mortgage. Lenders may charge origination fees, closing costs, appraisal fees, and other expenses. Request a Loan Estimate (LE) from each lender, which will provide a breakdown of the costs involved.

Customer Service and Support:

The mortgage process can be complex and time-consuming, so it’s essential to choose a lender who provides excellent customer service and support. A lender who is responsive and communicates clearly can help alleviate stress and ensure a smooth experience.

Prequalification and Preapproval Process:

Before you start house hunting, it’s advisable to get prequalified or preapproved for a mortgage. Evaluate the lender’s prequalification or preapproval process and the time it takes to complete it. A streamlined and efficient process can give you an advantage when making an offer on a property, demonstrating your readiness and seriousness as a buyer.

By evaluating interest rates, lender credibility, loan programs, costs, customer service, and the prequalification process, you can make an informed decision that aligns with your financial goals and preferences. Take the time to compare multiple lenders, gather all necessary information, and seek professional advice if needed. With the right mortgage lender, you can embark on your homeownership journey with confidence.