Blog – Fred Gruber - First Rate Financial Group

05

Nov

Mortgage Tips

What Mortgage Lenders Really Look At Before Approving Your Loan

One of the first questions homebuyers ask is how much they can afford to borrow. While the number may seem mysterious, lenders use a clear set of financial factors to decide how much you qualify for.

Understanding these factors can help you plan ahead, make smart choices, and feel confident as you start your homebuying journey.

Your Income and Employment History
Lenders begin by reviewing your income to determine if it is stable and sufficient to support a mortgage payment. They will verify your employment history, pay stubs, tax returns, and other documentation to confirm consistency. A steady income reassures the lender that you can manage monthly payments without financial strain.

vYour Debt-to-Income Ratio
Your debt-to-income ratio, or DTI, is one of the most important calculations in the loan process. It measures how much of your monthly income goes toward paying existing debts, including credit cards, student loans, car payments, and any other obligations. A lower DTI shows that you have room in your budget for a new mortgage, which can increase your borrowing power.

Your Credit Score and History
Credit plays a major role in the amount you can borrow and the interest rate you receive. A higher credit score tells lenders that you manage your finances responsibly and are likely to make timely payments. If your score is lower, lenders may offer a smaller loan amount or a higher rate to offset the perceived risk. Building and maintaining good credit before applying for a mortgage can make a meaningful difference.

Your Down Payment
The amount you plan to put down directly impacts how much you can borrow. A larger down payment reduces the loan amount and shows that you have a financial investment in the property. It can also help you qualify for better terms and possibly eliminate the need for mortgage insurance.

The Property Itself
The value of the home you want to purchase also affects your loan amount. Lenders will require an appraisal to ensure that the propertyís market value matches or exceeds the price you have agreed to pay. This helps protect both you and the lender from overpaying.

Mortgage lenders look at your full financial picture to decide how much you can borrow. By understanding and preparing for these factors, you can set realistic expectations, strengthen your application, and position yourself for success when it is time to buy.

04

Nov

By Fred Gruber

Home Buyer Tips

Steps to Take Now to Build Your Credit for a Home Purchase Next Year

Buying a home is one of the most exciting goals you can set, but your credit score plays a major role in how easy or challenging the process will be. The good news is that with time and planning, you can strengthen your credit and set yourself up for a smoother approval when you are ready to buy next year.

Review Your Credit Report
Start by pulling your credit report from all three major credit bureaus. Review each report carefully to make sure that your personal information and account details are accurate. Dispute any errors right away, since mistakes can bring down your score unnecessarily. This first step gives you a clear picture of where you stand and what needs attention.

Pay Down Existing Balances
One of the fastest ways to improve your credit score is to reduce your credit card balances. High credit utilization, which means using too much of your available credit, can make lenders view you as a higher risk.

Aim to keep your balances below thirty percent of your credit limit, and if possible, pay them off completely each month. Consistent progress here can have a significant positive impact.

Make All Payments on Time
Your payment history is the single biggest factor in your credit score. Set up reminders or automatic payments to ensure every bill is paid on time. Even one late payment can hurt your score. If you have any past-due accounts, bring them current as soon as possible. A record of consistent, on-time payments builds trust with future lenders.

Avoid Taking on New Debt
While it might be tempting to open a new credit card or finance a large purchase, adding new debt right before applying for a mortgage can lower your score. Each new inquiry slightly impacts your credit, and a higher balance increases your debt-to-income ratio. Focus on maintaining stability and demonstrating that you can manage your existing accounts responsibly.

Keep Older Accounts Open
The length of your credit history also matters. If you have older accounts in good standing, keep them open. Closing old accounts shortens your credit history and can reduce your available credit limit, which may cause your score to drop. Instead, use those accounts occasionally and pay them off to keep them active and positive.

Building good credit takes time, consistency, and awareness, but starting now can make a huge difference when you are ready to purchase a home next year. By following these steps, you will be in a stronger financial position and feel confident when it is time to meet with a lender.

03

Nov

By Fred Gruber

Financial Reports

What’s Ahead For Mortgage Rates This Week – November 3rd, 2025

With the ongoing government shutdown, other major releases have hit a snag, as there is still very limited information for when the shutdown may end. The largest and most impactful releases continuing to move forward are those from third-party sources still publishing data — such as the Consumer Sentiment reports — which show that consumers remain concerned about inflation but have recently grown more optimistic about the labor market.

As expected, the Federal Reserve cut rates again by another 25 basis points. However, Chairman Jerome Powell remains skeptical that another rate cut will occur anytime soon.

Consumer Sentiment
Consumers were more optimistic about the labor market outlook in October, according to a new survey from the Conference Board released Tuesday. The survey’s so-called labor-market differential — which measures the gap between the percentage of consumers who say jobs are “plentiful” and those who say jobs are “hard to get” — rose to 9.4 in October from 8.7 in the prior month.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.03% for this week, with the current rate at 5.41%
• 30-Yr FRM rates saw a decrease of -0.02% for this week, with the current rate at 6.17%

MND Rate Index
• 30-Yr FHA rates saw an increase of 0.06% for this week. Current rates at 6.01%
• 30-Yr VA rates saw an increase of 0.06% for this week. Current rates at 6.03%

Jobless Claims
Initial Claims were reported to be delayed until further notice.

What’s Ahead
U.S. employment data, if released next week, are likely to be the most significant reports to watch.