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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Especially in areas where housing values are quite high, jumbo loans are a common part of the financing process. Many people have heard the term but don’t quite understand what it means or in what situation you would need to obtain one. While jumbo loans are often used for high-value homes, inflated market prices in some areas mean that even a modest home can sometimes require one. What Is A Jumbo Loan? A jumbo loan is a mortgage loan for an amount that is in excess of what is considered a conventional loan. The maximum amount for a conventional loan is determined by the government-sponsored agencies Fannie Mae and Freddie Mac. That limit depends on the area of the country in which you live. In most parts of the nation, the conventional loan limit is set at $417,000. The limit in high cost areas has been changed a few times over the years. As of October 2011 it is set at $625,500. Any mortgage that is higher than these amounts is considered to be a jumbo loan. Jumbo Loan Rates And Lenders With the housing market having lost some ground, jumbo loans are not as popular or as common as […]
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If you are in the market for a new home, it’s important that you know what type of loans are available to you. Whether you have perfect credit, a few financial blemishes or are just starting out in life and want to own a home, understanding your options will prove to be invaluable during your house hunting excursion. Fixed Rate Mortgage A fixed rate mortgage is one of the most popular home loans and is commonly available as a 15 or 30 year term. Because it offers the borrower an assurance that both the principal and interest will remain the same throughout the term of the loan, a fixed rate mortgage is ideal for many. Adjustable Rate Mortgage (ARM) An adjustable rate mortgage, also referred to as an ARM loan, is one in which the interest rates adjust according to the current market. This means that interest rates can either increase or decrease at regular intervals, based on established market indexes. Interest-Only Mortgage An interest-only mortgage is one that requires the borrower to pay interest only payments for a preset number of years during the loan term. After that initial period, the monthly payments will then adjust to include both […]
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With mortgage rates on the lower side, the choice to cash in and refinance your mortgage may be tempting, but before you make that decision here are a few facts to help you decide if it is the best financial choice for you and your family. Whether it is just to reduce the amount of interest you pay, or freeing up some income for other items or debts, there are several considerations to take into account. Here are the more popular options for refinancing your mortgage. Fixed Rate Mortgages If you like the stability of a fixed rate loan because of your budget can’t handle unexpected fluctuation, then now might be a great time to choose this option. With fixed rates lower than they have been in some time, this may save you money by either reducing your monthly payments or, if you keep your payment the same, reducing the principal on your loan. Adjustable Rate Mortgages (ARMs) If you’re planning to stay in a home for only a few years, or your income can handle changing monthly payments, then you can get an ARM for significantly less than a fixed rate mortgage. Adjustable rate mortgages are also popular with […]
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Now that you’ve decided to purchase a new home, it’s important to know what to expect throughout the loan process. With the right knowledge, the road to home ownership is just ahead. Choose A Home Some lenders may offer a pre-approval, but others require that you have a specific home chosen before they will discuss loan options. Therefore, the first step to obtaining a home loan is to first select a home. Some sellers may require you to provide an earnest money deposit, which secures the home while you obtain financing and have the necessary inspections completed in order to finalize the purchase. Check Your Credit Before you even think about applying for a mortgage, it’s important to know where you stand from the lender’s point of view. Checking your credit report is a good idea for many reasons, but it’s an essential step in your journey toward buying a home. Every 12 months, you can request a free copy of your credit file from each of the three major credit reporting agencies – Equifax, TransUnion and Experian. Look for inaccuracies, outdated information or anything that requires your attention. If you spot anything, file a dispute right away to get […]
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Finding the perfect home is a task, but shopping for the best home loan can be even more tedious. With so many lenders promising low rates, closing costs and little or no down payment requirements, it’s often difficult to know which way to turn. Luckily, there are several steps that you can take to find the right lender for your individual needs. Assess Your Situation Do you know what your credit score is? If not, you should. Most lenders rely on this triple digit number to determine both your creditworthiness and interest rates. If you have excellent credit, you can probably work with almost any lender. If you have severe blemishes in your financial past, however, finding the right lender may require a little more footwork. How much money do you have for a down payment? If you are on a budget, you will need to choose a lender that can help to get you into a home with a minimal down payment. Knowing where you stand will give you a good idea as to which lender you need to work with. Compare Rates As is the case with anything in life, it pays to shop wisely. Because a home […]
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