Getting a Home Mortgage? Don't Even Think About Applying Unless you Have These 3 Things!

Purchasing a new home can be both exciting and terrifying as you put all your hard earned money towards a down payment, and prepare for one of the largest financial decisions you will make in your lifetime.

The best advice I can offer you when applying for a mortgage, is to be prepared! This means understanding all your finances including income, expenses, debt and credit history and score. When you come prepared to a mortgage lender or broker, you are more likely to explain your wants and needs, and the process will be expedited because they will not have to decipher your financial information.



The mortgage broker or lender will be able to simply verify your information and look at it from a lending stand point. They will be able to determine the amount of money you can handle as a monthly payment, how much money will be paid in interest, as well as the interest rate that is best suited for your level of risk. Generally, the better your financial position and credit history, the better your interest rate on the mortgage will be.

You are saving both yourself and the mortgage lender broker time in assessing your specific case.



By being educated, you also have a sort of protection device. You are more likely to sense wrong doings, or unfair dealings when you come prepared. They can not tell you something negative about your financial environment that is not so, because you know what your situation looks like and understand the type of deal you are capable of qualifying for.

So here are the top 3 things you need to have before you begin shopping mortgage lenders:

1. Credit Report

Don't rely on the mortgage lender to pull your credit report.



Take responsibility and pull it yourself! You can get your credit report for free. Check for mistakes or discrepancies, as they can happen often. You can see the exact items on your credit report and your credit score. Perhaps there are items you can quickly take care of, or items you simply forgot about that could be easily closed out. You can also have an explanation planned for less than attractive items on the credit report.

Perhaps you fell on hard times, but since have taken steps to correct the problem and are now in a better position.



When you understand your own credit history you have full control over the information and how it is used in the mortgage process.

It is much better to come prepared with an explanation for a negative item, rather than being surprised by the item by the broker and responding with a "What?" or "I don't know."

2. Income and Expense Sheet

In order to assess how much of a monthly payment you can afford, an analysis of your total income and expenses needs to be done. You can do this by writing down literally every source of income as well as the amount, on a monthly basis.



This may include pay checks, alimony, child support, investments, a side business etc. Anything that contributes to your income is a source.

You then would want to determine your monthly expenses, such as rent, car payment, food, cellular phone bill, utilities, clothing etc. Anything that is taken from your income is considered an expense.

Everything that is left over is considered disposable income, and this is used to help determine how much a payment can be afforded every month in congruence with your current rent or lease payment.



3. Asset Documentation

Assets are a definite plus when applying for a mortgage. It shows the mortgage lender that even if your cash reserves are depleted or in trouble, you will still be able to afford the monthly payment. Assets may include investment properties, investment accounts, types of cars and household items etc. Anything that can appreciate or return you money is considered an asset. Assets are used to gain wealth, not just have a large bank account.



Be prepared to show these assets with supporting documentation.

If you come prepared with this information and documentation to support it, you are half way to getting your mortgage application approved! The process will be much smoother and pleasant by having this information readily deliverable to who might need it. If you need help putting this together, ask for the help of a financial advisor. There are many resources available for your use.

John R Blakefield is a mortgage and real estate specialist.



For more information, articles, news, tools and valuable resources on home mortgages or investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/.

What Are Mortgage Brokers And Why To Use One

"Mortgage" is formed from two words: the French word "mort" meaning "dead" and the word "gage" from Old English meaning "pledge". Sir Edward Coke (who lived from 1552 to 1634) explained the term: the land as considered "dead" to the mortgagor, as if the person never had it.

Today, the term mortgage is used for a loan for purchasing propriety. The most common
mortgages are the home mortgages. It is not common to pay cash a home today.



The
"life' of a home mortgage is from 20 to 30 years. During all this years, the owner will pay
regularly and with the specified amount. There is also a term for the interest rate,
established to respect the seller and also the buyer conditions.

Most people think at a bank when thinking at a mortgage. It is the most trustful way to
get a mortgage; even the banks are asking the most rigorous set of documents to approve
it. The stability has its price: banks don't give the best interest rate, but there is also the
possibility to negotiate for the best acceptable solution.



Pertinent information empowers the burrower with the knowledge to make appropriate
decisions for his family and themselves.

The banks are making their money from activities like mortgage, so there will be always
good solutions for everyone. People can "shop around" to find the best mortgage
condition.

What are the mortgage brokers? They are making all the legwork for the customer.
Specialized websites are offering "perfect loan programs" in a few minutes.



A
professional research must be made to find the appropriate opportunity to buy the house
of our dreams.

Financial brokerage is a licensed company or individual who obtains a loan for borrowers
by selecting the best available solution at the best available rate. Real estate brokers help
borrowers to get a loan in accordance with their needs, making in the same time a
profitable investment for the financial brokerage or lender. All the work can be done
online, leading to a fast win-win situation for all.



The load mortgage broker has a professional expertise with direct access to many loan
products, providing customers efficient and cost-effective options that are meeting their
specific needs. He will provide customers with choice, convenience and expertise.

A good broker is the customer's mentor, guiding him to the entire loaning process,
balancing the client's financial goals, offering extensive choices.

A professional mortgage broker is using loan packages with less than perfect credit histories,
permitting to his customers to enjoy the benefits of home-ownership.



A mortgage broker isn't a banker, neither another financial lender. He is (or must be) a
real estate professional offering products and services. A broker can act as a banker too,
when funding loans.
Maybe the best part of a home mortgage broker activity is the help he is giving in
assessing the requirements and saving the customers time. Having contact with many
banks they can offer advices on the ways to overcome the frontiers to loan qualification.
A mortgage broker also knows the laws and regulations, simplifying the borrowers' task.



He is taking the application and obtains the credit report and appraisal. He counsels the
customer on the approval process; obtain the credit report and appraisal, collecting the
necessary documents. He also provides separate services and facilities to wholesale
lenders; market the lender's product also. Mortgage broker also is assembling and
delivering the completed loan package.

The mortgage broker really cares about the quality of the loan; the safety and soundness
of the mortgage lending community is linked to the success and efficiency of its home
loan originations.



Consumers who exercise their choice choose mortgage brokers because
they are dedicated to their customers, who are the consumers, and in the same time the
wholesale lenders.

May the broker steer consumers to the lender who pays the highest fees to the broker?
Isolated instances of steer can occur, but the free-market economy is protecting the
customer giving him a powerful weapon: the vigorous open competition. Each consumer
can shop and compare the prices; his final option will lead him to the best solution.



The
level of choices has no precedent.

For more information about Mortgage Brokers please visit our website at: http://www.better-mortgage.net

How To Reduce Your Mortgage Interest Rates

When it comes to buying a home, your mortgage matters just as much as the cost of your home. Interest might seem like a small percent, but when compounded over thirty years, it can literally double the amount you actually pay. If you want to lower your payments and pay less for your house, you should consider the many ways you can lower your interest payments by refinancing.



Taking advantage of a changing housing market is one of the easiest ways to lower your interest payments on your mortgage.



If you have a fixed interest rate and interest rates are dropping, you can refinance to an adjustable rate or a lower fixed rate mortgage. If rates are rising, you can do the opposite and change from an adjustable rate to a fixed rate; this can keep your interest rates from skyrocketing.



You may be able to lower your interest rate by taking advantage of an improved credit history. If your credit rating was low when you first acquired your loan, you may have a high interest rate.



If you've been paying your bills on time, your credit may have improved, in which case you might qualify for a lower rate. There are many credit repair companies that can help you improve your credit. Beware of credit consolidation companies, which actually can further damage your credit!



If you have two loans, a first lien and a second lien on your home, you may want to consider consolidating those two liens into one. Many people get equity lines on their homes, but don't realize that the equity line is adjustable, and often has quite a bit higher interest rate than the first loan.



Refinancing the two loans into one can often save money. Another strategy would be to pay down the equity line as soon as possible.



10-year and 15-year fixed mortgages usually have lower interest rates because the loan is getting paid twice as fast as a 30-year mortgage. The down-side is that the payments will be quite a bit higher.



No matter why you decide to refinance, always be sure to speak with several lenders first, or find out who your friends and colleagues use.



Good referrals are the best way to find a mortgage professional you can trust. Sometimes brokers may give you a quote that is not what you eventually get. Be sure to ask for a good faith estimate and ask to see proof that your loan is locked at the rate you are quoted to ensure it is the rate you actually get.



Beware of low start rate programs. They are usually not the actual interest rate, and may be simply a teaser or a negative amortization program that defers your interest payment until a later date.



This can help lower payments, but not the actual interest rate or amount you'll owe in the end.



Remember, before you take advantage of any refinancing offer, find out if it will actually save you money. On-line mortgage calculators help determine how much you'll pay using your new and old interest rates. Then you can just deduct the points and fees (unless they're included in the new mortgage) and find out how much you'll actually be saving.

Myths and Mortgages

Some of the mortgage companies today, sell their mortgage

packages with every kind of mythical benefit known to man, from

the belief that interest only is a real mortgage that will

eventually payout (slight of words, there) to the belief that an

interest only mortgage carries a lower interest rate(which is

does, but only for the short term). Let's start with some of the

more traditional loans, and move into the weird and unusual.



There has been a tremendous jump in the available interest only

mortgage packages in the last three to five years so maybe we

should take a minute to break down some of these mortgages into

a language everyone can understand



There's a 3/1 ARM. A 3 year ARM, means that the interest rate is

locked in for 3 years. For the first month, the interest payment

is only 1%, for the next 3 years following only the interest is

due as the monthly payment. After the 3 year term, and for the

remainder of the life of the loan, normally thirty years, the

interest rate will change, and the payments will begin to

include principal and interest.



There's a 5/1 ARM. A 5 year ARM, means that the interest rate is

locked in for 5 years. For the first month, the interest payment

is only 1%, for the next 5 years following only the interest is

due for the monthly payment. After the 5 year term, and for the

remainder of the life of the mortgage, normally thirty years,

the interest rate may change, and the payments will begin to

include principal and interest.



These mortgages also come in 7/1 and 10/1 ARMs, but analysts

really don't recommend extending the interest only option out

that far, since too many things can change before the 7 or 10

years is up.



The 10/30 interest only mortgage works in the following way: you

borrow money in the form of a 30 year mortgage, with a fixed

interest rate. The first 10 years are interest only payments,

with the full amount of the principal being amortized (interest

payments included) over the last 20 years of the loan.



The 15/30 interest only mortgage works in the following way: you

borrow money in the form of a 30 year mortgage, with a fixed

interest rate.



The first 15 years are interest only payments,

with the full amount of the principal being amortized (interest

payments included) over the last 15 years of the loan.



These mortgages are really appealing to the consumer with any

sort of investment knowledge. If I were going to borrower with

the interest only mortgage option, it would be one of these two,

the 10 or 15 of 30.



Now what other myths can we find? There's the belief that the

home mortgage income tax deduction is a substantial benefit to

the taxpayer, and that 1% interest only loans are for the life

of the loan! Ha! There's also the balloon note myth that

proliferates the belief you can automatically refinance through

your current lender when the note matures, or that adjustable

rate mortgages are a better deal than fixed rate!



Another mythical idea is that the real estate market can't go

bust.



An exploding growth rate in the mortgage loan industry,

and the continued surge in real estate prices, has put the

interest only mortgages in a huge category all their own. Up

from the first part of the century, the interest only mortgage

loans are now garnering nearly one-fourth of the mortgage loan

market. That kind of growth is almost frightening, to even the

most experienced lender. Can you imagine the possibilities, say

four to five years from now, when many of these loans come due

to pay the interest and the principal; what happens if our

economy isn't still a thriving bustling place?



The benefit of the interest only loan is that the consumer is

eligible to buy much more house, than with a standard mortgage.



That's great if you're certain in a given period of time, you'll

be able to afford a higher mortgage payment. But is anything

guaranteed and given in this day and time? What if you can't

afford the payment when the interest only term expires?



We have only to look at the disastrous consequences of the crash

of the stock market during the 1920s to appreciate where this

may be leading us today. Many people had financed their homes

with an interest only mortgage, and when the stock market

crashed and there was no work, they lost everything, including

their homes.



So, we not only promote mythical nursery rhymes, we promote

mythical mortgages, too!