Getting a Mortgage: 5 Ways to Improve Your Chances

 

Buying a home is a major financial investment, and, for many people, the largest purchase they will make. To buy a home, you’ll likely need a mortgage for funding that you can pay off over the long-term. However, not everyone will qualify for a mortgage.  Here are a few ways you can improve your chances on being approved right away;

1. Check Your Credit Report

Lenders review your credit report, which is a detailed report of your credit history, to determine whether you qualify for a loan and at what rate.

By law, you are entitled to one free credit report from each of the “big three” credit rating agencies (Equifax, Experian, and TransUnion) every year.

 You can use AnnualCreditReport.com to request your free copy, which you can get immediately in electronic format. Review your credit report for errors and to get an understanding of your credit history, such as if you have a history of late payments or high credit utilization.

2. Fix Any Mistakes

Read your credit report closely to see if there are any mistakes that could negatively affect your credit. Look for potential errors such as:

• Debts that have already been paid (or discharged)
• Information that is not yours due to a mistake (e.g., the creditor confused you with someone else because of similar names and/or addresses, or because of an incorrect Social Security number)
• Information that is not yours due to identity theft
• Information from a former spouse that shouldn’t be there any more
• Out-of-date information
• Incorrect notations for closed accounts (e.g., it shows the creditor closed the account when, in fact, you did)

Consider checking your credit report at least six months before you plan to shop for a mortgage so you have time to find and fix any mistakes.

3. Improve Your Credit Score

A credit score is a three-digit number that lenders use to evaluate your credit risk and determine how likely you are to make timely payments to repay a loan. The most common credit score is the FICO score, which is comprised of different credit data:

• Payment history – 35%
• Amounts owed – 30%
• Length of credit history – 15%
• Credit mix – 10%
• New credit – 10%

In general, the higher the credit score you have, the better the mortgage rate you can get. To improve your score, check your credit report and fix any mistakes, and then work on paying down debt.

Setting up payment reminders so you pay your bills on time, keeping your credit-card and revolving credit balances low, and reducing your debt. Avoid making a major purchase while you are applying for a mortgage.

4. Lower Your Debt-to-Income Ratio

A debt-to-income ratio compares the amount of debt you have to your overall income. It’s calculated by dividing your total recurring monthly debt by your gross monthly income, expressed as a percentage. Lenders look at your debt-to-income ratio to measure your ability to manage the payments you make each month, and to determine how much house you can afford.

Lenders like to see debt-to-income ratios that are 36% or lower, with no more than 28% of that debt going toward mortgage payments (this is called the “front-end ratio”). In most cases, 43% is the highest debt-to-income ratio you can have and still get a qualified mortgage. Above that, most lenders will deny the loan because your monthly expenses are too high compared with your income. 

To lower your debt-to-income ratio, and both are easier said than done:

• Reduce your monthly recurring debt.
• Increase your gross monthly income.

To reduce your monthly recurring debt, first cut back on purchases you make with credit. Look at where your money goes each month, figure out where you can save and make it happen. To increase your income, you can try to find a second job, work extra hours at your primary job, or request a pay increase.

5. Go Large with Your Down Payment

A large down payment can also help increase your chances of getting approved for a mortgage. The more money you put down, the more you reduce the loan-to-value ratio, which also increases your chances of getting the best mortgage interest rates.

The loan-to-value ratio is calculated by dividing the mortgage amount by the purchase price of the home (unless the home appraises for less than you plan to pay, in which case the appraised value is used).

Here’s an example. Say you plan to buy a house for $100,000. You put down $20,000 (20%) and seek a mortgage for $80,000. The loan-to-value ratio would be 80% ($80,000 mortgage divided by $100,000, which equals 0.8, or 80%). If you can put down $40,000 for the same house, the mortgage would now be just $60,000. The loan-to-value ratio would fall to 60% and it will be easier to qualify for the lower loan amount. 

When you're setting your down payment, remember that a 20% or larger down payment will also mean that you won't be subject to a mortgage insurance requirement, all of which can save you money. Source

DRE ID # 01769353

NMLS ID # 394275

What Is Adjustable-rate Mortgage (ARM)

 

Adjustable-rate mortgages (ARMs) have an interest rate that may change periodically depending on changes in a corresponding financial index that's associated with the loan. Generally speaking, your monthly payment will increase or decrease if the index rate goes up or down.

ARM loans are usually named by the length of time the interest rate remains fixed and how often the interest rate is subject to adjustment thereafter. For example, in a 5y/6m ARM, the 5y stands for an initial 5-year period during which the interest rate remains fixed while the 6m shows that the interest rate is subject to adjustment once every six months thereafter.

When might an adjustable-rate mortgage make sense?

• If you plan to move before the end of the introductory fixed-rate period, so you aren't concerned about possible rate increases
• If you want an initial monthly payment lower than a fixed-rate mortgage usually offers
• If you think interest rates may go down in the future

Source

DRE ID # 01769353

NMLS ID # 394275

6 Tips To Save For A House

 

Buying a home is one of life’s biggest milestones for countless Americans, and the largest purchase many will ever make.

For most mortgages, you’ll have to put at least some money down, and that’s not the only thing you should save for: There are also closing costs, property taxes, and ongoing repairs and maintenance. That’s a lot to take on, and it makes sense to take a few years to save up before you can buy a home. That may seem like a long time, but don’t worry — there are a few ways to speed it up. And while it’s tricky to amass thousands of dollars for a down payment when you’re already stretched to the max with expenses like rent, utilities, student and/or auto loans, transportation and possibly childcare, it is possible.

If you’re hoping to be a homeowner in the future, here are our best tips for how to save for a house;

1. Determine how much you need

You need a 20% down payment to buy a house, right? Not necessarily — many banks now offer conventional mortgage loans with down payments as low as 3%. There are also government-backed mortgages like FHA loans, which allow down payments starting at 3.5%, and VA loans and USDA loans, which may require no down payment at all. Depending on the loan, you may have to pay for mortgage insurance, but you may decide this is a worthwhile trade-off if it gets you into a home sooner. Meet with a mortgage loan officer to determine what types of loans you could qualify for, how much house you can afford and how much of a down payment you’d need. That will inform how much you need to save, and who knows — it may be a lot less than you think!

2. Get your debt under control

Carrying a lot of debt makes it more difficult to save for a house, since a chunk of your income goes toward repayments. That debt load can also make it more difficult to qualify for a mortgage. If you have debt, do whatever you can to reduce it. If you have student loans with high interest rates, consider refinancing them to lower your payments. If you have high-interest credit card debt, pay off as much as you can and consider transferring your balance to a low-interest card.

3. Put retirement savings on temporary hold

Caveat: This might not be advisable if you’re close to retirement. But if you’re young and actively contribute a percentage of your income to a retirement plan, like a 401(k) or IRA, consider temporarily diverting that money to down payment savings. This should only be short term, but it can make a big difference in how quickly you can save for a house, especially if you currently put a sizeable chunk of every paycheck into a retirement account.

4. Use technology to make saving less painful

Cutting back and setting aside money is obviously important if you want to save up for a house, but taking a portion out of each paycheck can feel like it’s cramping your style. If that’s the case, try an app like Digit, which uses technology to automatically save a daily amount small enough that you won’t notice it or hurt your budget. There’s also Acorns, which rounds up your purchases to the nearest dollar and puts the difference in an investment account. Your spare change can add up quickly over time, and you can also make one-off deposits whenever you’re able to.

5. Ask for gift money

When your family asks what you want for your birthday, Christmas or Hanukkah, anniversary or any other special occasion, tell them you’d love to forgo tangible items and instead receive gift money that you can put toward a house down payment. While not everyone may oblige, some of your relatives may enjoy knowing they’re helping you attain your dream of homeownership.

6. Get a side gig

With the gig economy continuing to expand, there are ways to make a quick buck to help boost your down payment savings. Consider spending a few hours a week driving for a ride share service, shopping or delivering meals for an online delivery service, walking dogs, pet sitting, charging self-service scooters … you get the idea. Thanks to technology, there is an ever-increasing number of freelance opportunities like these that require very few qualifications and make it easy to earn extra cash you can put away for a home. Source

DRE ID # 01769353

NMLS ID # 394275

Home Warranty vs Home Insurance—What’s the Difference?

 

Like most homeowners, you have a lot of money invested in your home. But, you also understand that things happen, and protecting your investment and its contents against unforeseeable situations is important. But if you’re shopping for home insurance vs. home warranty policies, the lines between the two might be starting to blur. What are these coverages and how do they differ? Let’s find out.

What Is a Home Warranty?

A home warranty is an agreement between a homeowner and a third-party warranty company that provides coverage for certain items within the home. This policy protects the homeowner’s investment in the event that if a covered item should break or fail, the warranty company will cover most of the repair bill. All the homeowner is responsible for (in most cases) is the service fee, which typically ranges from $50 to $150, and is agreed upon in the contract.

What Does a Home Warranty Cover?

Home warranties cover major appliances and systems that fail due to everyday use. There are typically three types of home warranties available. They include appliance policies, system policies and combination policies. Appliance policies cover items like refrigerators, built-in microwaves, stoves, ovens, dishwashers, washers and dryers and other typical appliances found in a home. Should one of these items fail, the homeowner can file a claim with the warranty company to have a technician respond and repair the appliance. If they’re unable to repair the item, the warranty company may even replace it.

System policies cover items such as electrical systems, plumbing systems and HVAC systems. In some cases, these policies may cover roofing systems, fire alarm systems, central vacuum systems and septic systems as well. If there are issues with these major systems, the homeowner can file a claim and the warranty company will send the proper contractor to repair the problem.

Combination policies act as both appliance and system policies.

If a covered item should fail or break due to typical wear and tear, the warranty company will most likely cover it. Understand that this does sometimes require the homeowner to keep maintenance records to prove that the items aren’t failing due to neglect.

What Doesn’t a Home Warranty Cover?

There are plenty of items or circumstances which a home warranty company will not cover. First, home warranties do not cover structural issues, interior or exterior finishes, furniture or other belongings. Also, should an item covered under warranty break due to neglect, misuse, abuse or an accident, the warranty company will not cover the repair.

It’s important to note that many home warranty companies set limits as to how much a single repair can cost. For example, if the homeowner’s extremely high-end refrigerator fails and requires a repair item that costs $1,200, but the home warranty company set a limit of $1,000 for refrigerator repairs, the homeowner will have to pay the additional cost.

What Is Home Insurance?

Home insurance is an agreement between a homeowner and a third-party insurer that protects the homeowner’s investment against accidents, building failures and natural disasters. These policies even provide some degree of general liability insurance against injuries incurred by other people while on the property.

Any home paid for with a mortgage will be required to carry home insurance by the lien holder (the bank).

What Does Home Insurance Cover?

Home insurance covers much more than a home warranty. There are four types of coverages, including dwelling, other structures, personal property and liability.

Dwelling coverage helps to pay for repairs or losses due to covered events. These events may include fires, storm damage, fallen trees or other unforeseeable events.

Other structure coverage offers the same type of coverage as dwelling coverage with the exception that it’s specifically designed for detached garages, sheds and even guest houses built separately from the home. Personal property coverage helps homeowners recover financial losses to the items within the home or other structures damaged by covered events. So, if there was a plumbing leak that ruined a couch, the insurance company may cover the damage.

Liability insurance protects the homeowner against financial losses due to someone getting hurt on the insured property. Or, if they accidentally damage another person’s property, liability coverage can protect them against financial losses. If an incident occurs, the homeowner can file a claim with the insurance company. At that point, the insurance company will send an adjuster to the property to assess the damage and assign a value.

What Doesn’t Home Insurance Cover?

Every policy is different, but there are some general items that most insurance policies do not cover. They include:

• Damage from earthquakes
• Flood damage
• Maintenance issues

Like a home warranty, home insurance won’t cover the entire bill. Rather than a service fee, homeowners using their home insurance policy will have to pay a deductible for each instance. For example, if the homeowner’s insurance deductible is $1,000 and a covered event occurs with a total value of $3,000, the homeowner will receive $2,000 for the damage ($3,000 less the $1,000 deductible).

For more information and description of differences please click here...

DRE ID # 01769353

NMLS ID # 394275

What Is Mortgage Refinancing?

 

Mortgage refinancing can help homeowners save money by reducing their interest rate and improving the terms of their mortgage. If interest rates have dropped since you first took out your mortgage, refinancing may lead to significant savings.

However, refinancing may not pay off in every situation. Learn what mortgage refinancing is, how it works and when it might save you money.

How does a mortgage refinance work?

Mortgage refinancing allows you to replace your existing mortgage with a new one, ideally with a lower interest rate and more favorable terms. When you refinance, you'll receive money up front to pay off your old mortgage. Then, you'll begin paying the balance of the new loan.

If you're considering a refinance, you have a few options:

• A traditional refinance covers only the amount you still owe your lender, known as the principal.
• A cash-out refinance, on the other hand, replaces your old mortgage with a larger one that allows you access the difference between the two loans in cash, which can be used to fund major expenses, such as a college education, or renovations that might increase the overall value of your home.

Common reasons for mortgage refinancing

You might refinance your mortgage for a number of reasons:

• Lower your interest rate. If market conditions or other circumstances have changed over the life of your loan, you may qualify for a new mortgage with a lower interest rate. For example, interest rates may drop if the economy has improved since you first took out your mortgage. Alternatively, an increase in your credit scores may boost your creditworthiness in the eyes of your lenders, which may help you qualify for a better interest rate. Your credit scores are among the factors that lenders consider when setting the interest rate and other terms of your mortgage.

• Change the mortgage length. Refinancing may allow you to shorten the length of your loan. This means you'll pay off the mortgage faster, leading to fewer interest payments over time. Depending on your new loan's interest rate, however, a shorter term may mean you owe higher mortgage payments each month.

• Change the mortgage type. If you have an adjustable-rate mortgage (ARM), your interest rate may change in response to market conditions. Fluctuations in your interest rate can get expensive, especially if you took out your loan when rates were low. To help stabilize or lower your interest rate, you might refinance to a fixed-rate loan.

• Access cash. A cash-out refinance allows you to borrow against your home equity with a new loan that's worth more than what you owe on your current mortgage. You'll then receive a lump sum in cash you can use to pay for major purchases. Cash-out refinance loans typically have lower interest rates than personal loans or credit cards.

How to know when to refinance your mortgage

Should you refinance or not? Unfortunately, there's no definitive answer to this question. Whether a refinance is right for you depends on your unique circumstances.

If you're considering a mortgage refinance, evaluate whether your financial situation has meaningfully changed since taking out your original loan. Have your credit scores improved? Have you increased your income significantly? If either applies to you, you may now qualify for a better offer from your lender.

Next, determine if market interest rates have dipped in the intervening years. Consider refinancing only if your lender offers a new interest rate that is at least 2% lower than your current rate. You'll also need to consider the current length of your mortgage. If you only have five years of payments left, it's likely best to stick with your current loan. If your mortgage is new, be aware that most lenders have a waiting period of zero to 210 days before you'll be able to refinance. Attempting to refinance before this period is up could result in a significant penalty fee.

Finally, don't forget to factor in closing costs — a collection of fees and other expenses you'll pay on closing day. These generally total between 2% and 6% of the loan amount, adding a high cost to your refinanced loan. Before you sign on the dotted line, make sure that your closing costs don't exceed any potential savings. Source

DRE ID # 01769353

NMLS ID # 394275

The Power of Getting Pre-Approved

 

Buying a home is exciting — but let’s be honest, it can also feel overwhelming. As we move through 2026, buyers will need to navigate a housing market shaped by shifting inventory, evolving buyer demand, and fluctuating mortgage rates. In this environment, preparation isn’t just helpful — it’s essential.

One of the smartest first steps you can take? Getting pre-approved for a mortgage.

Why is a pre-approval so powerful?

A pre-approval isn’t just another box to check — it’s a strategic advantage. Here are five key ways it sets you up for success in today’s market:

1. Know Your Budget and Shop With Confidence

A pre-approval shows you exactly how much home you can afford, helping you set realistic expectations before you start touring properties. That clarity saves time, reduces stress, and keeps you focused on homes that truly fit your financial picture.

2. Stand Out to Sellers and Strengthen Your Offer

In competitive markets, sellers want certainty. A pre-approval shows that your finances have already been reviewed and verified by a lender, positioning you as a serious, well-prepared buyer. When multiple offers are on the table, that credibility can be the difference between winning and missing out.

3. Move Faster When the Right Home Comes Along

Much of the financial legwork is completed during the pre-approval process, which means fewer hurdles once you’re under contract. That efficiency can help you close faster — an advantage sellers often prioritize when choosing an offer.

4. Protect Your Rate and Save Over Time

Depending on market conditions, a pre-approval may allow you to secure a more favorable interest rate. And even small rate differences can add up to significant savings over the life of your loan.

5. Catch Potential Issues Early

A pre-approval includes a review of your credit and financial documentation. If there are any errors or red flags, you’ll have time to address them before they can delay — or derail — your purchase later in the process.

Source

NMLS ID 394275 | DRE ID 01769353

Investors: Looking to Purchase Under Your LLC?

 

 We Can Help.

If you’re expanding your real estate portfolio, now is a great time to explore financing options that allow you to purchase investment properties directly under your LLC. This approach can offer clearer liability protection, streamlined bookkeeping, and a more professional structure for growing your holdings.

Whether you’re acquiring rentals, short-term properties, or long-term assets, we can walk you through:

• Loan programs designed for LLC-owned properties
• Requirements and documentation you’ll need
• How to structure your purchase for smoother underwriting
• Opportunities to leverage equity for your next investment
• Ready to grow your portfolio with confidence?

Let’s review your goals and find the right financing strategy for your LLC.

NMLS ID 394275 | DRE ID 01769353