Are you in search of a home mortgage? Do you want to know how to get approved? Perhaps you have already been denied a mortgage but need to know what you did wrong in the past? Continue reading for some helpful tips you can use when it comes to home mortgages.
While you wait for a pre-approved mortgage, do not do tons of shopping. A recheck of your credit at closing is normal, and lenders may think twice if you are going nuts with your credit card. Hold off on making a big furniture purchase or buying other big ticket items until you have completed the deal.
Most mortgages require you to make a cash down payment. Although zero down payment mortgages were available in the past, most mortgage companies make it a requirement. You should know what the down payment is before applying.
Get a disclosure in writing before you sign up for a refinanced mortgage. The items included should state closing costs and all fees involved that you must pay. Though most lenders are up front about their charges, others tend to disguise fees so that you do not notice.
It is a smart idea to reduce your total debt prior to purchasing a home. A mortgage is a large responsibility. You need to be certain that you can consistently, regardless of circumstances. Keeping your debt load down will keep you secure and better able to withstand any emergencies.
Once you get a mortgage, try paying extra for the principal every month. This lets you repay the loan much faster. You can reduce the time of your mortgage by 10 years if you pay $100 extra each month.
Know all the fees that are involved when trying to get a mortgage. There are a lot of things that can go wrong when you’re trying to close out on a home. It can be quite confusing and annoying. However, with the proper legwork, you can both talk the talk and walk the walk.
Interest Rate
Do not accept an interest rate that is variable. The payments on these mortgages can increase substantially if economic changes cause the interest rate to increase. It could cause the monthly payments to become so high that you can no longer afford to pay for the home.
In a lending market that’s tight, you should keep a high credit score to get the best mortgage rate out there. Get your credit reports from the big three agencies to make sure they contain no errors. In today’s market, your credit score should be 620 or above for you to qualify for a traditional home loan.
A good way to secure a much better interest rate through your current mortgage lender is to shop around to other banks. A lot of financial institutions, particularly those solely online, offer rates lower than more traditional banks. Use these as you pursue a better deal.
If you’ve been denied, just try again with a different lender. Don’t change anything. It may not be your problem, but just the persnickety nature of a given lender. A different lender may be more than willing to approve you.
The rates banks post are not the final rate. Find a competitor which offers a lower rate and let the bank know your plan is to go with them – you’ll get all of the features you like at the bank without the high posted rate you can’t afford.
Prepayment Penalties
Watch out for loans that have prepayment penalties. If you have a good credit score, you will not even need to sign away prepayment penalties. Being able to pre-pay can save you tons on interest over the course of the loan, so know that before giving away this important opportunity. You should really think about it.
Now that you have read this article, you should know much more about getting yourself approved for a mortgage. People can get approved for a mortgage, but they have to use their heads and know what lenders want to see. Fortunately, this article showed you how you can maximize your chances of getting your loan approved.
