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/.

Heinous Mortgage Mistakes

Homeowners make a variety of costly mistakes when it comes to mortgages. Here is all you need to know to avoid these mistakes.

Any homeowner regardless of their credit, needs to avoid making financial mistakes when it comes to their mortgage. If you are in the process of taking out a mortgage you need to research lenders and do your homework to avoid common mistakes.

Here is a checklist to help you avoid costly mistakes when taking out a mortgage.



Does The Mortgage Have a Prepayment Penalty?

This is one of the first things you should look for when evaluating mortgage offers. Prepayment penalties are a fee you will have to pay if you refinance or sell your home. This expense can be as high as six months worth of interest on 85 percent of the original loan value. This expense defeats the purpose of refinancing; any potential savings from refinancing will be lost to the penalty.

This is especially undesirable if you had to take out a mortgage with a high interest rate or unfavorable terms due to your credit.



After six months to a year of a bad credit mortgage you will want to refinance to a traditional mortgage with better rates and conditions; avoiding a prepayment penalty will save you money.

What is the Exact Interest Rate?

Getting the lender to commit to an interest rate can be harder than it sounds. Make sure you get the exact interest rate in writing. Make sure it is not a "Discount Rate" or an "Introductory Offer." Make sure the lender or broker will lock this mortgage rate and give you enough time to close on the loan.



Negotiate with your lender for a lower interest rate; you might offer to prepay points in exchange for a better rate or more favorable terms.

Is Your Lender Pushy?

Do not be a victim of pressure sales tactics. If you feel your lender or broker is being pushy, look elsewhere. Mortgage lenders that practice pressure sales are more likely to practice predatory lending practices as well. To avoid being taken advantage of you should look for your mortgage somewhere else.



Know Your Budget Before You Shop

Many homeowners rush their financing to avoid losing their dream home. The are happy enough just being approved that they take a mortgage with unfavorable terms and rates. You can avoid falling into this trap by doing your homework first and having a budget. Do not plan on having lower payments in 2-3 years; you need to budget for today, especially if your financing falls through 2 or 3 years down the road.

To learn more about avoiding common homeowner mistakes sign up for our free mortgage guidebook.



St Louis Mortgage Refinance

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker.

He is the owner of Mortgages Refinance Advisor, a mortgage help site devoted to saving homeowners money with a free guidebook Mortgage Refinance: What You Need to Know. Sign up for your free guide today at: http://www.refiadvisor.com