Welcome to First Indiana Mortgage

  • Local Indiana Company
  • Dedicated Team of  Professionals
  • Excellent Rates
  • Home Purchase and Refinance Loans

Preparations before applying for a loan

Applying for a mortgage can be a daunting task, that involves supplying substantial amounts of information regarding your credit history, employment and income. It is best to review your credit report in advance of applying for a loan, so that you can address any inaccuracies and identify steps that you can take to improve your credit score.

In today’s market, the credit score plays a significant role in your ability to obtain a loan at a favorable rate, so it will serve you well to review your credit report and address the items that tend to lower your overall score. Your credit score is a numerical evaluation of your credit risk, and is derived from many factors, as discussed below. The two primary factors that influence your credit score are the amount of credit that you have outstanding in comparison to your maximum credit limits, and whether you pay your bills on time. Before applying for a loan, you should pay down your credit cards and other debts, and limit your use of credit. By doing so, your credit score will increase due to the fact that your balance-to-limit ratio will be improving. As with all liabilities, it is important to pay all of your bills on time – even a single missed payment will impact your score negatively, and it may take months for your score to recover.

Your employment status and history are also important factors that lenders will analyze to determine your credit worthiness. Generally, you would want to be able to document a two year stable work history, with no unexplained gaps in employment, before applying for a loan. Commissioned and self-employed applicants generally will have to provide their tax returns for the prior two years to document their incomes, and document to the lender that there are no undisclosed liabilities or expenses that would impact their creditworthiness.

Finally, applicants need to determine how much they can use as a down payment, and how mush they can afford to pay on a monthly basis for housing expenses, which include principal, interest, taxes and insurance on the new home. Lenders will want to see a minimum down payment of 20% of the purchase price, otherwise, you will be required to obtain and pay for private mortgage insurance.

By keeping up on your credit report and having your finances in order prior to shopping for a home, you can eliminate much of the stress of applying for a new loan. If you are searching for a loan in the state of Indiana, First Indiana Mortgage can help you to obtain a mortgage. Please visit www.firstindianamortgage.com to obtain a rate quote, and to initiate the loan process.

Applying for a mortgage can be a daunting task, that involves supplying substantial amounts of information regarding your credit history, employment and income. It is best to review your credit report in advance of applying for a loan, so that you can address any inaccuracies and identify steps that you can take to improve your […]

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