Buying a home can prove to be both a fun and stressful time, especially when you aren’t sure if your home mortgage loan was approved or not. The information that follows can help you get the best mortgage for your circumstances. It has tips you can use to get the best rate possible and how to avoid some of the pitfalls.
Pay off current debt, then avoid getting new debt while you go through the mortgage process. Your qualification options will be much more viable if you keep your debt to earnings ratio low. Your application for a mortgage loan may be denied if you have high consumer debt. Carrying debt could cost you a bunch of money via increased mortgage rates.
Try refinancing again if you’re upside down on your mortgage, even if you have already tried to refinance. New programs (HARP) are in place to help homeowners out in this exact situation, no matter how imbalanced their mortgage and home value seems to be. Speak with your lender to find out if this program would be of benefit to you. If a lender will not work with you, go to another one.
Your lender may reject your mortgage application if your financial picture changes. You should have a stable job before applying for a mortgage. You shouldn’t get a different job either until you have an approved mortgage because the mortgage provider is going to make a choice based on your application’s information.
Prior to submitting an application for a mortgage, prepare all documents that will be needed. Many lenders require these documents. You will be asked for pay stubs, bank statements, tax returns and W2 forms. The mortgage process will run more quickly and more smoothly when your documents are all in order.
The value of your property may have increased or decreased since you got your original loan. Your approval chances could be low because of a drop in actual value of your residence.
If you are denied a loan, don’t give up. If it happens, approach another lender and try again. Every lender is going to have a certain barrier you must pass through to get your loan. It is for this reason, that it is beneficial to you to apply with different lenders.
As a first-time homebuyer, you may qualify for government programs. There are a lot of government programs that help out with costs for closing, helping get a mortgage with a lower interest rate, or someone who can help you with your credit score.
Get all your financial papers in order before talking to a lender. The lender is going to need to see bank statements, proof that you’re making money, and every other financial asset you have in document form. Have all the paperwork well-organized. If you are well-prepared you are more likely to be approved and the process will go quicker.
Find out what the historical property tax rates are on the house you plan to buy. Before signing a contract, you should know how much the property taxes are going to cost you. Sometimes property taxes are a lot higher than you may imagine at first. This can turn into a real surprise.
If dealing with your mortgage has become difficult, look for some help as soon as possible. Counseling might help if you cannot stay on top of your monthly payments or are having difficultly affording the minimum amount. Your local housing authority will have recommendations for credit counseling services that you can use. With assistance from counselors that are HUD approved, free counseling can be had that helps with preventing foreclosures. Contact your local HUD office to find a counselor near you.
Make sure to minimize debts before buying a new home. Having a home mortgage requires greater responsibility and with that comes increased risk, but to lessen that, you should never add on too much debt. With less debt, it will make it easier to do that.
Think about more than banks for mortgages. For instance, your family might help you out, even if it’s just with a down payment. You may also be able to work with a credit union because they have a lot of good rates usually. Think about your options when looking for a good mortgage.
Learn how to avoid shady mortgage lenders. While most lenders are legitimate, some will try taking you for a ride. Avoid lenders that try to fast or smooth talk you into a deal. Avoid signing paperwork if the rates look too high for you. Do not go to a lender that claims that bad credit scores aren’t a problem. Don’t go with lenders who suggest lying on any applications.
Know what your other fees will be, as well as your mortgage fees, before you sign a formal agreement. Ask the company to itemize each closing cost, including commissions and other charges. Certain things are negotiable with sellers and lenders alike.
Steer clear of variable rate loans. The interest rate on these types of loans can increase drastically, depending on how the economy changes, which can result in your mortgage doubling. That means there’s a chance that you’ll price yourself out of paying off your loan. That’s never a good thing.
Getting a loan pre-approval letter can impress a seller while showing them you are prepared to buy. This also demonstrates that you are financially sound. Only share the amount of the pre-approval with your broker. If it’s higher, they’ll ask for more.
Before you select a mortgage broker, do a check at the BBB. Bad brokers will try to sucker you into bad mortgages. Stay wary of brokers claiming you must pay high fees or unnecessary points.
Many people have to get a mortgage in order to own a home. If you know what you need to get a loan, it doesn’t have to be stressful. You should apply the tips you just read to apply for a mortgage and take the time to do more research on this topic.