Getting a House Mortgage in North Carolina: Tips and Tricks You Should Know

While buying a house is a thrilling and exciting journey, it’s not an easy road. You have to consider the local economy, your financials, and the North Carolina housing market. All these factors will impact what home you go for and how much it will cost you. The more you know about how to get a house mortgage in NC, the better you will understand the options open for you.

Residential Real Estate Home Loan


Evaluate Your Financial Situation

So are you planning to take out a mortgage to pay for that house of yours? If yes, then first, you need to understand the impact of your financial situation on your buying options. Before jumping into getting a pre-approval for your mortgage, take a step back and look at your credit reports first. Your credit score will determine if you can get the loan that you want. You should also check for discrepancies, errors, identity thefts, or incorrect information on your reports. If there’s an issue, open up a dispute with the bureau.

You can get your free credit report by visiting annualcreditreport.com. After receiving the report, check for any items that can negatively affect your credit scores. Things that can impact your score include delinquent payments, accounts in collections, bankruptcy, liens, or too many credit inquiries.

A Good Credit Score Will Go a Long Way

Do you have a perfect credit score? No? Get your score cleaned up because when you apply for a mortgage, you need a score of at least 620–640. Some government-backed lenders will let you apply for a mortgage even your score is as low as 500. But in this case, you need to fulfill some other criteria as well. It would help if you always aimed for a higher score, improving your chances of getting a loan at reasonable terms.

You can improve your credit score by making all your credit payments on time and in full. Your debt payment ratio accounts for 35% of your credit score. Moreover, the amount of your unpaid debt against the credit received contributes to another 30% of your credit score.

A picture of a pile of pennies

A word of advice: try to keep your debt ratio at a minimum and don’t make a lot of large credit purchases a few months before applying for a mortgage, as that will harm your credit score again.

Find Out If You Can Afford a Mortgage

Before you decide to pour everything into a house, make sure you can afford it. How can you find out if you can afford a mortgage or not? Go for the 28/36 rule, which refers to your debt-to-income ratio.


Your front-end DTI should not go above 28%. Front-end DTI shows how much of your pre-tax income is allocated to mortgage payments along. Your back-end DTI includes all debt payments, including the mortgages, and this should not go above 43% though the ideal DTI, in this case, is 36%. If your front-end and back-end DTI goes above the perfect ratios, you need to pay off and close some of your debts before applying for a home loan.

Work with Us

Phillip Fehler is one of the most experienced and professional realtors with enough experience and contacts in the industry, especially with the authorized conventional and government-based lenders in North Carolina. Hire him to navigate through all the red tape and manage the complexities associated with home mortgages. Contact Phillip Fehler here to learn how he can help.

  

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