Top Mortgage Lenders in San Angelo, TX

With a heated housing market and rising mortgage rates complicating the home buying process, it is more vital than ever to be prepared and aware of the mortgage procedure before you begin home hunting.

According to the National Association of Realtors’ 2021 study, 87 percent of recent buyers financed their house purchases, with first-time homebuyers financing 10% more than repeat buyers on average.

Unfortunately, that means that the folks who will benefit the most from acquiring the correct mortgage and terms will likely be the ones with the least experience with the process.

In theory, getting a mortgage in San Angelo,TX is simple: persuade a lender that you are likely to repay the amount plus interest.

But there are a lot of moving elements beneath the surface. Even little decisions, such as how you prepare for homeownership or the sort of mortgage you obtain, can have significant financial effects.

Here’s what you need to know about getting a mortgage and selecting the best mortgage lender in San Angelo, TX.

Ready to apply for a home Loan? I’m a licensed mortgage loan officer in San Angelo, TX and I’d love to help you get pre-approved for a home. Call or text me at 325-261-0265 if you’re ready to get started or if you have any questions.

How to Choose a Mortgage Lender in San Angelo, TX

Numerous banks, internet lenders, mortgage brokers, and other companies are waiting to accept your loan application. Here’s everything you need to know about selecting the best mortgage lender in San Angelo, TX.

Before you begin shopping, there are a few things you can do to get the most fantastic deal:

• Improve your credit score
• Establish your budget.
• Understand your mortgage alternatives.
• Compare interest rates and terms from various lenders.
• Obtain a mortgage pre-approval.
• Study the fine print.

Step 1: Improve your Credit

Before you begin looking for a mortgage lender and applying for a loan in San Angelo, TX, review your finances and make any necessary improvements. This entails obtaining your credit score as well as your credit records.

You are entitled to a free credit report from each of the three major credit reporting agencies (Experian, Equifax, and TransUnion), which you may obtain from AnnualCreditReport.com.

If your credit score could use some improvement, start by reviewing your credit reports for inaccuracies, late payments, delinquent accounts in collections, and large amounts.

Paying down each of your credit cards to less than 30% of available credit and making on-time payments are the greatest ways to boost your credit score.

Read Next: Mortgage Loans in San Angelo, TX: What to Know

Step 2: Establish a Budget

Knowing how much house you can afford is vital to getting the right mortgage.

A lender may qualify you for a loan that exceeds your budget and leaves little room for unexpected needs, but taking out such a loan may be a disastrous financial decision.

Lenders pre-approve you based on your gross income, outstanding loans, and revolving debt. However, they do not include other monthly expenditures in their estimates, such as utilities, gas, daycare, insurance, or groceries.

Consider these types of expenses as well as other financial goals to obtain a better understanding of what you can afford. Calculate how much you should spend on a mortgage using your monthly net income.

Step 3: Research your Mortgage Choices

Knowing how to speak their language is essential for selecting the ideal mortgage lender in San Angelo, TX, as is understanding the many sorts of mortgages.

Some preliminary research might also assist you in distinguishing between mortgage truth and lies. For example, many people’s initial ideas regarding securing a mortgage are to go to a bank or that they need a 20% down payment to finance a home. But that is an old way of thinking.

Many lenders in San Angelo, TX provide conventional loans with as little as 3% down, and some government-insured loans need no or only 3.5 percent down.

Consider FHA and USDA loans and VA loans if you are a veteran. Remember that many lenders may charge you a higher interest rate and require mortgage insurance if you put down less than 20%.

Step 4: Compare Interest Rates and Terms from Different Lenders

Choosing the first lender you speak with is not a good idea. Instead, rate-shop with various lenders, including banks, credit unions, online lenders, and local independents, to ensure you receive the greatest deal on rates, fees, and conditions.

Look for a lender who interacts with you in the method you like, whether online, by text, or in person.

You may be wasting money if you do not shop around. Several studies, including those conducted by the Consumer Financial Protection Bureau and Freddie Mac, have shown that comparing mortgage rates can save homeowners thousands of dollars over the life of a 30-year loan.

Step 5: Obtain a Mortgage Pre-approval

Obtaining a mortgage pre-approval from three or four different lenders is the only way to acquire realistic loan pricing because lenders conduct a complete evaluation of your credit and finances with pre-approval. In addition, lenders may have various pre-approval documentation requirements.

In general, you will need to provide:

• Driver’s license or other government photo identification
• Social Security numbers (to pull credit)
• Residential address history, as well as landlord names and contact information from the last two years
• Pay stubs from the last 30 days
• Federal tax returns, 1099s, or W-2s for the previous two years
• Bank statement prints for all accounts for the last 30-60 days
• List all revolving and fixed debt payments, such as credit cards, personal and auto loans, student loans, and alimony or child support.
• Employment and income history, as well as current employer contact information
• Down payment details, including the amount and source of funds, as well as gift letters if you are receiving assistance from a relative or friend
• Any recent liens or legal judgments filed against you or other borrowers, such as IRS actions, bankruptcy, collections accounts, or litigation

Keep in mind that a mortgage pre-approval does not guarantee you a loan. During the procedure, lenders may re-evaluate your credit, employment and income history, and assets.

Getting a new auto loan, for example, changes your financial picture and can throw your mortgage off track.

Step 6: Read the Fine Print

We understand: mortgage documents make your eyes glaze over. However, if you do not read them carefully and there are any inaccuracies or surprises, you may have buyer’s remorse afterward.

Check out this tutorial on the loan estimate form lenders must provide you within three days of receiving your mortgage application.

Pay particular attention to your interest rate, monthly payments, lender and loan processing fees, closing charges, and down payment amount.

If your credit and financial profile remain unchanged, these factors should not alter much from pre-approval through closure.

Frequently Asked Questions (FAQ)

How can I increase my approval odds?

Reviewing your credit history and finances ahead of time is the best approach to maximize your chances of getting approved for a mortgage.

This allows you to rectify any inaccuracies or blemishes on your credit report and raise your credit score.

Making a larger down payment or having more money set away in savings will boost your chances of being approved if you have the money.

Lenders are attempting to assess your likelihood of repaying the loan, and having more skin in the game, or a cushion for unexpected expenses, will work in your favor.

What can I do to get the best mortgage rate?

Mortgage rates differ significantly amongst lenders. So, the most important thing you can do to acquire the greatest mortgage rate is to shop around.

Your credit score and loan-to-value ratio are two essential criteria in mortgage rates (LTV).

To get the best rate, you should raise your credit score to at least 740. When it comes to LTV, strive for a 20 percent down payment or an LTV of 80 percent or less.

The length of your mortgage also has an impact on your interest rate. Interest rates on shorter-term loans are often cheaper. For example, a 15-year loan will have a lower interest rate than a 30-year loan.

Can I get a mortgage if I have bad credit?

Obtaining a mortgage in San Angelo, TX with bad credit can be challenging but not impossible. It all relies on a variety of things.

Furthermore, a lower credit score will generally have a higher mortgage rate and may require a larger down payment.

As a result, low credit scores make borrowing money more expensive. In addition, a higher interest rate raises your monthly payment, which reduces the amount you can borrow. This implies you’ll have to cut back on your home buying budget.

With bad credit, conventional loans are tough to obtain. As a result, you’ll almost certainly need to qualify for a government-backed loan.

FHA loans can be an excellent alternative because the FHA only demands a credit score of 500 or higher with a 10% down payment and a credit score of 580 or higher with a 3.5 percent down payment.

However, different lenders have additional requirements in addition to the FHA guidelines, and many will not provide FHA loans if your credit score is less than 620.