The thought of taking on a home mortgage is understandably overwhelming. It’s better to deal with lenders armed with knowledge; it will help you to make informed decisions. These tips can set you on the right path to the best home loan for you.
If you are considering quitting your job or accepting employment with a different company, delay the change until after the mortgage process has closed. Your mortgage loan has been approved based on the information originally submitted in your application. Any alteration can force a delay in closing or may even force your lender to overturn the decision to approve your loan.
Organize your financial life before going after a home mortgage. If your paperwork is all over the place and confusing, then you’ll just make the entire mortgage process that much longer. Do yourself and your lender a favor and put your financial papers in order prior to making any appointments.
If your mortgage has been approved, avoid any moves that may change your credit rating. Your lender may run a second credit check before the closing and any suspicious activity may affect your interest rate. Don’t close credit card accounts or take out any additional loans. Pay every bill on time.
Try getting pre-approved for a mortgage before you start looking at houses. This will make the closing process a lot easier and you will have an advantage over other buyers who still have to go through the mortgage application process. Besides, being pre-approved will give you an idea of what kind of home you can afford.
Make sure you look at multiple mortgage lenders before settling on one. You definitely need to do some comparison shopping. There are a lot of different mortgage rates and deals out there, so stopping at just one could really mean wasting thousands of dollars over the life of your mortgage.
Use local lenders. If you are using a mortgage broker, it is common to get quotes from lenders who are out of state. Estimates given by brokers who are not local may not be aware of costs that local lenders know about because they are familiar with local laws. This can lead to incorrect estimates.
If you have filed for bankruptcy, you may have to wait two or three years before you qualify for a mortgage loan. However, you may end up paying higher interest rates. The best way to save money when buying a home after a bankruptcy is to have a large down payment.
Having a strong employment history will make it easier to qualify for a home mortgage. Lenders like to see that you have been at the same job for a good length of time. Barring that, they like to see continuous employment for at leas the past five or more years.
If you are thinking abut changing jobs, try to wait until after your loan approval process is over. This is because the underwriter will have to go through the employment verification process all over again. They will also require you to submit paycheck information, which means that you would have to put the loan off until after you are paid a few times.
If you are a first time home owner, get the shortest term fixed mortgage possible. The rates are typically lower for 10 and 15 year mortgages, and you will build equity in your home sooner. If you need to sell you home and purchase a larger one, you will have more cash to work with.
Before applying for a home mortgage, get your debts in order. Consolidate small debts with high interest rates and put a solid effort into paying them off. Do not take on new debt while you are preparing to apply for a home mortgage. The cleaner your debt record when you apply for a home mortgage, the better your chances of getting approval for a good loan at a good rate.
Before you even start looking at a new home to buy, try to get pre-approved for a home. This will give you confidence when looking for a new home and let you know what your budget is. It will also save you from choosing a home only to find out you cannot secure a large enough loan to purchase it.
Do not forget to consider the local property tax rates before you enter into a home mortgage contract. Just because you can afford the mortgage payment does not mean that you will be able to afford the taxes on the home. In some areas the taxes on a modest home can feel like a second mortgage, so be sure to look into this.
Be sure that you know exactly how long your home mortgage contract will require you to wait before it allows you to refinance. Some contracts will let you within on year, while others may not allow it before five years pass. What you can tolerate depends on many factors, so be sure to keep this tip in mind.
Get your credit under control. If you currently have a wallet full of plastic for every occasion, you should downsize. Having too much available credit can harm your loan, even if it is not debt. Close any non-essential accounts. Chose a gas card, a store card, and a single credit card to keep.
There is a lot to know when it comes to home mortgages. With what you learned here, you can be one step ahead. Use these tips when you want to get a mortgage to ensure the best deal.
