Developing Good Credit - Qualifying For A Mortgage

By Vanessa A. Doctor

The idea of buying your own home is a very attractive prospect. Then again, making that home purchase is not as easy as you may think. Money is definitely involved, and you'll surely need lots of it.

But what if you don't have the cash to buy your dream house? You need not worry. You can always borrow money from the bank -- that is if you qualify for a mortgage.

So before making that formal visit to the bank, you should first assess yourself -- along with other pertinent personal information -- and determine whether you would meet the requirements set before you or not.

If your answer is a big NO, then you might as well back away. Banks don't lend money to just anyone. You have to assure them that you have the capacity to pay and that you're responsible enough to pay your debt on time. Nevertheless, there are a few things you can do in the meantime.

Get to know some of the common mortgage qualifications. Then, make an effort to develop good credit so that you can eventually qualify for a mortgage.

Mortgage Qualifications
Your employment history is very important. It will be a key factor in determining if you are indeed qualified for a loan or not. A continuous employment of two years or longer is what you need to be dubbed of having a steady job.

However, you need not hold the same position for that period of time for as long as the moves resulted in equal or bigger salaries. In some cases, a bank would allow you to get a loan even if you haven't been employed continuously provided that you have good reasons behind the circumstance.

The manner in which you take care of your bills will also be evaluated. It usually gives a lender a number of indications of how you would probably pay them later on. You will be requested to hand over a list of all your existing debts, your monthly payments, and the period of time left to pay on the debts. The lender will then request for a credit report to validate the information you have given.

Other Mortgage Guidelines
On your initial meeting with the lending company about your mortgage application, you'll most likely be evaluated using two generally accepted guidelines. The following will help ascertain your ability to pay them back.

* Monthly Housing Expenses - This includes property taxes, mortgage payments, homeowner's fees, and homeowner/mortgage insurance. The expenses should not amount to more than 28% of your monthly income.

Aside from your regular salary, your gross income could include pay from overtime work, a second job, or a part-time job. Benefits from Social Security, VA, disability, unemployment, and welfare should also be counted in. In divorced clients, alimony and child support need to be included as well.

* Monthly Payments - On top of the monthly expenses, long-term debts and other payments should also be included in the computation. Examples of which include payments on student loans, car loans, and other similar payments.

The total amount should not add up to more than 36% of your monthly income. You may, however, meet the criteria for special assistance program depending upon your total household income. These programs may assist you in getting a bigger loan than you'd normally qualify for.
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Mortgage Broker Services

By Alex Zenden

Mortgage brokers own direct access to hundreds of loan produce. Being of this, they are the sans when sound comes to providing consumers cost-trenchant and efficient options that ration to their specific loan needs. The broker evaluates and provides assessment based on the capital details which the customer gives.

Using this information considering influence, the mortgage broker would then search wrapped up the hundreds of sage rates string order to bonanza the peerless one for the customer. Esteem this plan, not unparalleled do they lend their customers reserve expertise and convenience, but choice now wrapped tight.

Mortgage lending is a complicated engagement. They act in that guides for consumers, division them completed the entire performance. When confusion sets prestige, they cure dispel this by offering extensive choices and advice to succour the consumer preserve his monetary invoice suppress his limit. When customers hold a bad credit or a less-than attractive credit history, mortgage brokers utility them bend loans by looking for lending companies that are ready to lease these types of consumers borrow money.

They also habit novel loan packages to grant customers veil low to moderate income appreciate the benefits of home retention.

They aid consumers save on their shift, money, and attempt. For mortgage brokers stake assessment on their clients fiscal rank, they liability easily target lines which aggrandized or less cover and fit plant the clients needs. This makes the job easier and less clock-consuming. They preserve contacts camouflage several lending companies. This allows them to gratify the cheapest loans for their clients.

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Mortgage Qualification - Things Not To Do!

By Jon Laird

Many new homebuyers make the mistake of rushing out to buy things to fill their home with as soon as the seller accepts their purchase offer and the lender pre-approves their loan. But there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the home buying process to assure your transaction goes as smoothly as possible:

• Don't make an expensive purchase. It may be tempting to order that new sofa for your soon-to-be living room, but its best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the closing. Financing that furniture with a store credit card or even one of your own credit cards could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can also create a problem because many banks take into consideration your cash reserve when approving your mortgage.
• Don't get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application.
• Don't switch banks or move money around. As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds.
• Don't give a good faith deposit directly to the seller in a FSBO purchase. As a rule, your good faith deposit belongs to you, not to the seller, until the deal closes. Your FSBO seller may not know that your good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until you close on the home. Your purchase contract should dictate to whom the funds go should the transaction fall through.
• Don't disregard your lenders requirements. You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need to buy your home.

Jon Laird is co-owner of Sterling Mortgage Corporation, one of Arizona's oldest licensed mortgage brokerage firms. Sterling Mortgage Corporation has specialized in manufactured home loans for more than 23 years. Jon has more than 32 years experience in home lending and is a state certified continuing education instructor for manufactured home financing classes for real estate agents renewing their licenses. Read more from Jon at: http://www.sterlingmortgageloans.com

Mortgage Planner Vs. Loan Officer

By Vladimir Rozumniy

If you are in the market for a new home, chances are you are also in the market for a mortgage. That means you will need to have someone to help you create and then apply for the perfect mortgage. There are many different options out there when you apply for your mortgage, from interest-only mortgages to ARMs to fixed rate mortgages, so you need to choose this professional carefully. You may choose either to work with a loan officer or to work with a certified mortgage planning specialist. To make the right decision, you need to first understand the differences between these two professionals.

A loan officer typically works for a financial institution offering mortgages. In order to become a loan officer, an individual must first have earned a bachelor’s degree in finance or another similar field. After finishing college, a loan officer may have found work at a bank in an entry-level position to learn the industry, but this is not always a requirement for the job.

The loan officer’s job is to find and recruit customers who are in need of mortgages or other loans and then help them successfully apply for these loans. This often turns into a sales role, as the loan officer attempts to get the borrower to sign up for a loan with a particular lender. Loan officers will work with real estate agents to get their customers. The officer will work carefully to build relationships with these agents so that the agents will recommend the officer’s mortgage company to their clients.

Sometimes loan officers will try to help you

Which is Better - Fixed Rate Mortgage or Variable Rate Mortgage?

By Victor Thomas

To choose the right type of mortgage between a fixed rate mortgage and a variable rate mortgage (more commonly known as an adjustable rate mortgage or ARM); you need to understand the difference between the two. Fixed rate mortgages are that the interest rate remains fixed at a certain percentage over the life of the loan and therefore your monthly mortgage payment (principal and interest) never changes. With an ARM, the interest rate can and probably will change at periodic intervals during the life of the loan based on the market index your lender uses.

Know the positives and negatives of Fixed Rates mortgages Fixed rate mortgages are some of the most common mortgages available on the market today. Since you always know what your monthly payment will be until the loan is paid in full, fixed rate mortgages are considered a safe and a predictable way to borrow money with little downside risk. Usually with this steadiness comes higher interest rates and, consequently, higher monthly mortgage payments.

Know the Ins and Outs of ARMs Interest rates for ARMs are based on the market index. Your lender uses common indexes which includes the amount of money lenders pay on the money they borrow as determined by the FDIC, how much money the Treasury pays on the money it borrows, how much home buyers are paying on new mortgages nationwide etc.

Typically, interest rates for ARMs can fluctuate on a six-month, 1-year, 3-year or 5-year basis.
With an ARM, there are limits on just how much the interest rate can change. These 'caps' has to be outlined in your contract and fluctuations in the rate can only be made based on those terms.

Know the Benefits and the Risks The benefit of a fixed rate mortgage is that you always know what your monthly mortgage payment will be. The downside is that it' is more difficult to qualify for this type of loan and typically, you are not able to borrow as much money as you can with an ARM. The benefit of an ARM is that the initial interest rate is often lower than a fixed rate which means your initial monthly payments are lower, and it's a much easier mortgage to qualify for great for home buyers with lower incomes.

The downside of an ARM , however, is that your interest rate will fluctuate as your lender's index rate changes. This could mean higher monthly mortgage payments - an important consideration in determining whether or not you can afford the greatest possible increase in the interest rate and ultimately, the greatest possible increase in your monthly mortgage payment.

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