Washington Informer

Wells Fargo Provides Tips to Help Perspective Homebuyers Get in Position for Mortgage Loan Approval

Interest rates remain at historic lows. Yet, many buyers are sitting on the fence unsure whether now is the right time to buy, and if they would even qualify for a loan. There's no magic bullet to get you the loan you want, but there are few things you can do to help get you on the right path. Here are some helpful tips to make you look your best in the eyes of a lender:

1. Check your credit – Know where your credit stands before you apply for a loan. A borrowers' credit history can impact the amount required for a down payment, the interest rate or the amount of money they can borrow in relation to their income. Wells Fargo prices competitively and lends across the credit spectrum, but having a credit score of 720 or above is not only going to help you look better to a lender for loan approval, it may also help you get a better interest rate. Once per year, you are able to obtain a free copy of your credit report from each of the three credit bureaus by visiting www.annualcreditreport.com. In addition to viewing your report, you may also want to consider getting your credit score. There may be a small fee to get your credit score. If you're interested in understanding and working to improve your credit standing, visit the Wells Fargo Smarter Credittm Center found at www.wellsfargo.com/smarter_credit. The site has advice on establishing, improving and protecting credit as well as tips on paying down debt.

2. Decrease your debt – An important factor that lenders look at when qualifying borrowers is their debt-to-income ratio. This is the relationship between your income and expenses, amount of debt a person carries compared to how much income they make. The smaller your debt-to-income ratio is, the more attractive you are as a borrower. While debt to income requirements vary by mortgage programs, a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.

3. Save for a down payment – In the current mortgage environment, borrowers need to have a down payment. Having 20% down is not a must but it will help get the best interest rate available and help you avoid private mortgage insurance. If you need help coming up with a down payment, try to find a down payment assistance program that might be able to assist you.

4. Show proof of all income– Can you repay the loan? That's what lenders want to know when they consider your application. You must be able to verify a stable source of income. Lenders will review your employment history and will require current W2s or tax returns if you are self-employed. If you have any other income you should bring proof of that to share with the lender.

5. Have some money in the bank – In addition to being able to show you can make your monthly mortgage payments and other responsibilities, lenders want to know that you have cash reserves . Some of us call this cushion a "rainy day fund" to handle those unexpected expenses that come with homeownership such as certain repairs.

Nationals Ryan Zimmerman slides into third base safely before Rays Ben Zobrist could tag him during baseball action between the Nationals and Tampa on Thursday, June 21 at Nationals Park in Southeast.

Former Redskins star Darrell Green threw out the ceremonial pitch on Thursday, June 21 as part of the Black Heritage Night program.

Members of the Ridge Road Recreation Center Baseball Team along with their coach, Kenya Stroughter Sr., participate in the Black Heritage Night Festivities at Nationals Stadium in Southeast on Thursday, June 21. The Ridge Road Recreation Center in Ward 7 and home to the Titans, offers youth basic baseball instruction in a competitive environment and promotes sportsmanship, integrity and respect for authority.

Amid mounting violence in the north, Nigeria's President Goodluck Jonathan has fired his national security adviser and defense minister.

While it has remained unclear who will replace Defense Minister Bello Mohammed, the president's security aide Owoye Azazi will be replaced by Sambo Dasuki, a retired colonel from the Muslim North.

The announcements were made recently following a spate of attacks that targeted at least three churches, and in which about 150 people were killed.

Reports also state that new incidences of rioting occurred later, and that curfews have since been imposed in both northeastern cities of Kaduna and Damaturu.

Meanwhile, President Jonathan has faced mounting criticism over the manner in which growing insurgency has been responded to, with analysts noting serious concern that residents could increasingly take the law into their own hands if the authorities do not tackle the problem.

Bernette Joshua Johnson, an associate justice on the Louisiana Supreme Court for nearly two decades, is poised to assume the post of chief justice early next year when the current judge Catherine D. Kimball, retires in January.

But Johnson, who was first elected to the state's highest court in 1994, is the second longest serving jurist on the bench and is next in line for the post, faces opposition.

Kimball has not only called for a hearing to determine her successor, she has also issued an order recusing Johnson from sitting on the panel that will determine how the issue will be resolved.

Ron Wilson is one of the attorneys who successfully sued Louisiana in 1986 for Voting Rights Act violations surrounding the state's manner of selecting Supreme Court justices. "The constitution says who the chief justice will be, not the state Supreme Court," Wilson was quoted as saying a National Coalition on Black Civic Participation (NCBCP) report.

Marc H. Morial, National Urban League president and an original plaintiffs in a lawsuit filed on Johnson's behalf, has likewise responded saying any efforts to derail Johnson's a appointment is an affront to the Voting Rights Act.

Another plaintiff, Ron Chisom, stated his support.

"Justice Bernette Johnson isn't a token judge; she's a real judge," Chisom said in the NCBCP report. "I'm honored to play any role in fighting for her."

Meanwhile, Johnson just one of just a few African-American jurists to serve on Louisiana's high court. The others include Justice Jesse Stone who was appointed to briefly serve in 1979 and Justice Revius Ortique, who was elected to a seat on the court in 1992.

When it comes to financial independence, it often seems that there are certain members of society who just have a better chance of succeeding than everyone else. In fact, there is a anecdote that makes the rounds every so often that claims if you take a group of millionaires; remove all of their knowledge, wealth, and experience; and stick them in the middle of a desert with nothing but a gallon of water, almost every single one of them will be back to millionaire status within 10 years. While it is hardly ethical or scientific to actually put this theory to a test, the basic premise is pretty reasonable: the wealthy are wealthy because finances, investments, and making money are what they're good at doing.

Financial Independence: Your Goals, Your Life

While it may not be your life goal to become a millionaire, it would be difficult to convince anyone that being financially independent or comfortably wealthy wouldn't be a nice break from the routine of everyday life. Yet few people really take advantage of what they currently have to try and amass the kind of wealth that will allow them an early retirement or that beach house in the Grand Caymans.

The primary culprit? Not having solid, attainable fiscal goals.

This may seem oversimplified at first, but the fact is, most people view financial investments or long-term financial planning as something that can wait or that can be set aside when everyday life gets in the way.

The best financial advisors and investment firms, however, will tell you that the first thing you can do to start making the kinds of decisions that will create a solid portfolio of wealth for the future is to sit down and really outline what it is you want and what steps you can take to get there.

For example, imagine a family whose three children are only a year apart in age. They're young right now, but the parents one day hope to see all of them in the college of their dreams. There are a number of steps that need be taken to make that goal a reality, and not all of them have to do with stepping up the piano lessons or moving to a neighborhood with the best public schools. In order to reasonably put three kids through college, it is best to create a financial plan with actual, numerical results at the end. Saving whatever is left at the end of the month is a good first step, but unless you sit down and look at what kinds of investments that money needs to go into to get the necessary percentage increase in 15 years, you aren't following a financial plan – you're just saving money.

The Bottom Line

Understanding that difference – the difference between saving money and following a financial plan – is what really separates the millionaires from the rest of the population.

The good news is, in today's world, you don't have to have the know-how yourself to move from saving to creating an investment plan. Thanks to financial advisors and other professional firms dedicated to turning fiscal dreams into realities, everyone can tap into the knowledge it takes to move – if not quite to millionaire status – as close as necessary to live the life you deserve.