Home ownership is a dream that is shared by many. This dream is usually achieved through a mortgage. Yet, the mortgage aspect of this dream often turns into a nightmare. If you want to keep the mortgage portion of your life nice and dreamy, read this mortgageblogpro article for tips and tricks to use.
There are loans available for first time home buyers. These loans usually do not require a lot of money down and often have lower interest rates than standard mortgages. Most first time home buyer loans are guaranteed by the government; thus, there is more paperwork needed than standard mortgage applications.
Before applying for a mortgage, pay down your debts. Lenders use a debt to income ratio to verify that you are able to afford a mortgage. A general rule of thumb is 36 percent of your gross income should be available to pay all of your monthly expenses, including your mortgage payment.
When considering the cost of your mortgage, also think about property taxes and homeowners insurance costs. Sometimes lenders will factor property taxes and insurance payments into your loan calculations but often they do not. You don’t want to be surprised when the tax office sends a bill and you learn the cost of required insurance.
If your application is refused, keep your hopes up. If it happens, approach another lender and try again. Every lender has different criteria. Therefore, it may be beneficial to you to apply with a few mortgage lenders for best results.
If you’ve gotten approved for a mortgage, don’t make any other big purchases until after you’ve closed on your home. Typically your lender will pull your credit once again right before closing. If there are issues that crop up it could lead to problems with your closing. Be smart and curb spending until all is complete.
Check out more than one financial institution when shopping for a lender. Ask about all fees and charges. Find reviews about different lenders online and speak to family and friends. Once you have a complete understand of what each offers, you can make the right choice.
Shop around for the best interest rate. A loan approval happens regardless of interest rates, but the rates determine the amount you must pay back. Know what you’ll be spending and how increases or decreases affect your loan. If you’re not paying attention it could cost you a lot of money in the long run.
If you are thinking about refinancing, then now is the time to do it. Do not procrastinate. When rates drop, you need to get in while they are low. While rates may stay low for a little while, they will eventually go up. So do not delay when interest rates are low and go ahead and refinance.
Don’t use real estate brokers or mortgage lenders who encourage you to lie on your home mortgage application. It is illegal to lie on this application, and it is a legal document. Misrepresenting your income or other information is grounds for criminal prosecution. Working with people who encourage you do commit a crime is not a good idea.
Look for a company to use for your home mortgage that has a high rate of satisfaction from their customers. Just because a company has a big name does not mean that they treat their customers well. You should look into the reviews of a company before you agree to work with them.
As mentioned in the introduction, the concept of owning your own home is a dream that you share with most everyone. Yet, if you have ever had to deal with business financing or having a mortgage, you know that is the flipside of the coin. Hopefully, the ideas presented within this article make your mortgage dealings a breeze.