If you are a first time homebuyer, navigating all the new information about homeownership, the home buying process, and mortgages can seem overwhelming. If you are beginning the mortgage shopping process, but have no clue as to what information you’ll need and whether or not you’ll even qualify, here is some information that may make the process a little smoother. Will I Qualify For A Mortgage? There are essentially three things that lenders look at to determine whether or not you qualify for a mortgage. Income Verification When purchasing a property, all income of a homebuyer must be validated by a mortgage underwriter in order to receive a loan. Income verification can be done using several types of documents such as a W-2 statement, paycheck stubs, or income tax statements that show proof of income. These documents usually will have to span a period of two years or more to show you have a history of a steady income. Income proof can include such things as child support payments, disability payments, or income from the Social Security Administration. These additional monthly payments can increase your potential to qualify for a mortgage, as well as the amount you will qualify for, […]
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With the financial markets in crisis and the cost of homes plummeting, the subprime loan options that were responsible for this crash in the first place are becoming less common. But there are still lenders offering these risky loans, and this article will convince you to avoid what may seem like an offer too good to refuse, especially if you are having trouble finding a traditional loan. Here are three reasons why you should avoid subprime lenders! High Interest Rates The most obvious reason to avoid subprime loans is the high interest rate that comes with them. In most cases, if you fall into the subprime category you represent a higher risk than normal for the lenders, and the increased rates protect their investment. Inevitably in this category a certain number of borrowers will default on the loans, and the higher rates ensure that the lender still makes money. This means that you will be paying more for your house than it may ever be worth, and it essentially no longer becomes an asset, but rather a liability. Questionable Business Ethics Another reason to stay away from subprime lenders is their track record of questionable business practices. The bailouts of […]
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