You’ve decided to look for your dream home in the area of your choice, you know exactly what kind of home you need, you’ve crunched the numbers and now you’re looking for a mortgage lender. How do you know that you are getting a reliable lender that will give you the best deal? Do you know and understand the entire mortgage process? Here are a few tips and hints to help you navigate the mortgage process.
Understanding the Mortgage Process
What Credit Score Do You Need to Buy a House?
Although your credit score is by no means the only factor that will be taken into consideration by mortgage lenders, it will play an important role in determining how much interest you will pay on your loan.
Therefore, the better your credit score, the less costly your home financing will be. To date, if your credit score is at least 660, you will typically qualify for a mortgage with a decent interest rate.
You may also qualify for bad credit mortgage financing with some lenders who specialize in working with borrowers with poor credit, even if you’ve been turned down by other lenders.
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What Other Factors are Important?
As well as your credit score, mortgage lenders will also take a close look at the other information on your credit report including:
- Your account status – they will want to see that you have had credit or bank accounts open for at least one year, and that you do not have judgments or collections against you. If you do have outstanding collections or judgments, you will need to take care of these before you can obtain a loan (excepting outstanding medical bills).
- Mortgage payments – they will want to see if you have made any other mortgage payments within the past year.
Another thing that lenders will want to see, which will not be on your credit report, but will be verified, is your rental history, to ensure that you have not made any late payments. If you have had more than one late payment within the past 12 months, you may have a hard time getting approved for a mortgage.
Choosing a Money Lender
There are plenty of mortgage lenders out there. Although you may not be familiar with them, that doesn’t necessarily mean that they are not trustworthy. If you prefer a smaller company to finance your new home, check them out thoroughly.
Find out how long they have been operating. Check with the local Chamber of Commerce to see if they are upstanding members and how much influence and input they have in the local community.
If you prefer a larger mortgage lender with a solid reputation, you may already know of someone who has done business with a local company. Talk to your family, friends, and colleagues and find out about their experience with local lenders.
Select the Right Type of Mortgage
Remember, you will be going through a lengthy mortgage process from pre-approval to closing with your loan company so make sure you feel comfortable working with their representatives. Make sure they answer all your questions and don’t put you under any pressure to submit your application until you are perfectly ready to.
It is important that your mortgage lender helps you find the right loan for your situation. Discuss the options before you decide which type of product fits your needs and circumstances. Get a rate quote and compare the quote to offers from other lenders in the area.
You can find out more information about types of mortgage, mortgage rates, and interest rates and connect with a mortgage advisor online. Don’t forget that your house may also have to qualify before you can get a mortgage. This means the residence must meet certain standards and home conditions. It will also have to be insurable.
Finding a Realtor
Once you are preapproved you can start looking at homes for sale. Before you jump on the first realtor in a particular area, why not look for commission rebate realtors who will guarantee you a cash back rebate? You stand to gain up to 1% of your realtor’s total commission on the house sale at closing.
Discount real estate agents can help put money back in your pocket at a time when you really need it. You can search the internet for a listing of commission rebate real estate agents in the surrounding areas, and you’ll be glad you did when it comes to closing on your new home and you suddenly have several thousand dollars to spend on decor or improvements.
There is a wide variety of lenders out there and there’s really not a single source of real estate financing that works for everyone. The best way to approach a mortgage is by searching for the best deal and finding a provider that meets your personal needs.
Alicia Bull shares real estate tips in her articles; buying, selling, mortgages and decluttering, she covers it all!