Are you searching for a new home? Do you need to refinance your current home loan? If you must borrow your purchase funds, a mortgage is necessary. The whole process can be confusing, but with some knowledge, it can be a lot easier.
Quite a while before applying for your loan, look at your credit report. The new year rang in stricter loan controls so getting your own affairs in order is more important than ever.
Before you apply for your mortgage, be sure you’re in possession of all the documents that are necessary. The same documents will be required from a variety of lenders. Make sure you have items such as W2s, bank statements, income tax returns, and the last two pay stubs. The mortgage process will run more quickly and more smoothly when your documents are all in order.
You need to find out how much your home is worth before deciding to refinance it. Your home may look the same as the day you moved in, however other factors can impact the way your bank views your home’s value, and can even hurt your chances for approval.
Before you meet with any lenders, make sure you have all the financial document you need. The lender will need to see proof of income, your bank statements and documentation of your other financial assets. If you have this collected beforehand, it will be easier to complete your mortgage application quickly.
If your mortgage is a 30 year one, think about making extra payments to help speed up the pay off process. This money goes straight to your principal. If you’re able to make a payment that’s extra on a regular basis, your loan can be paid off a lot quicker so that you don’t have to pay so much interest.
If you have trouble making your mortgage payment, get some assistance. If you get behind on making payments, or if you are really struggling to meet them on-time, look into mortgage counseling. There are various agencies that offer counseling under HUD all over the country. With the help of HUD-approved counselors, you can get free counseling for foreclosure-prevention. Call or visit HUD’s website for a location near you.
If you want an easy approval, go for a balloon mortgage. This is a shorter term loan, with the balance owed due at the loan’s expiry. This can, however, prove to be quite risky as rates may increase, or your finances may take a turn for the worse.
Think beyond banks in terms of mortgage opportunities. Family could be a cheap source of a loan, for example. Credit unions often provide decent rates for borrowing money. Consider everything before applying for your mortgage.
If you’re not able to get a mortgage from your credit union or bank, try getting in touch with mortgage brokers. A broker might be able to help you find something that fits your circumstances. They work with different lenders to get the best option for you.
Going in, know what all fees and costs will be. You will also be responsible for closing costs, commissions and miscellaneous charges. You can often negotiate these fees with either the lender or the seller.
With what you’ve gone over here, you shouldn’t have trouble when you want to get a mortgage. Use all of this information to make your way through the process more efficiently. Don’t be scared by the process of getting a home mortgage.