So, you're interested in getting a home loan (mortgage) for
your dream home.
To accomplish this, there are a few steps you need follow to
ensure that you get a home loan more beneficial to you than
to the bank.
The first step is to order your credit report.
There are three major credit reporting agencies, Equifax,
TransUnion and Experian.
You can do this online (quick and easy), via mail or since
you are seeking a home loan, have your mortgage broker or banker
order one for you in advance.
Knowing what is contained in your credit report is very
important.
When evaluating your application for a mortgage, lenders use
your credit report to help them determine your ability to
pay off the mortgage you are applying for.
Utilizing your credit report, lenders are able to determine
to whom you are indebted, the timeliness by which you are
paying your obligations and your total indebtedness.
A good credit report assures the lenders that their risk in
investing with you by granting you a home loan is minimal.
By this I mean that they will feel more confident that they
will get their money back and assures you that your mortgage
loan gains approval.
In fact most financial experts recommend that you to check
your credit report regularly for errors and particularly
before submitting applications for credit to lenders.
It is not uncommon for credit reports to contain outdated
information and/or errors which can cost you thousands of
dollars more in interest or worse, cause the lender to deny
you the home mortgage you are applying for.
The next step in acquiring a home loan is to be aware of
current mortgage rates and fees.
Mortgage rates can fluctuate dramatically by both region and
lender.
Also, learn the terms lenders use for their different fees
and take time to know the figures attached to them.
Fees, like interest rates fluctuate both regionally and by
lender.
This is where you can save considerable money by reducing or
eliminating some or all of these fees.
You can typically find current rate as well as some fee
information on line, by visiting area banks or in your local
newspaper (best).
The third step in taking a home loan is to know the various
mortgage programs available.
You will ultimately need to decide which mortgage program is
best for you.
Today, there are a multitude of programs and home loans
available. There are fixed and adjustable rate loans, conventional and
government backed loans, interest only loans as well as
loans offering payment options.
It would be wise to have at least a basic knowledge of these
mortgage options in order to get the best home loan for your
situation.
Though there are numerous on line and print resources
available to you for acquiring this knowledge, I recommend that you
seek the advice of a mortgage professional.
Since it is your intent to apply for a home loan, call a
mortgage broker, banker or loan officer and schedule some time for a
mortgage program review.
I am certain that almost any mortgage professional wanting
your business will be happy to sit down and outline the various
available programs for you.
The next step is to review the whole mortgage package.
Aside from interest rate, other things to consider are the
number of years you plan to stay in the house, type of home loan
desired, the amount of down payment, monthly payments, mortgage
insurance requirements, escrows for taxes and insurance, any
prepayment penalties, the effects of extra principal payments and more.
Remember, a home loan is a long term investment that
requires a considerable amount of commitment and money.
Lastly, once you have chosen the lender as well as the
program for your home loan, you will need to gather together the
documents required to obtain your loan.
Typically these will include a completed 1003 Uniform
Residential Loan Application, your credit report, verification of
employment (2 years minimum), verification of rent/mortgage payments
(2 years), verification of income (2 years IRS W-2's or tax
returns) and letters of explanation for any negative items identified on
your credit report (i.e. late payments, judgments etc.).
Additionally, fees are often collected when submitting
application for a mortgage.
Some of which are application and appraisal fees. While
other requirements and fees needed to be paid for your home loan
application may vary from one lending institution to another.
I sincerely hope that you find this information useful and
above all helpful.
However it is merely a guideline, your individual circumstance may
(and probably will) differ in such that it might be easier or considerably
more complicated.
I strongly suggest and recommend that you speak with a
mortgage professional.
Feel free to bring this with you when you meet, use it to as a reference
to prompt question and answer discussion.
Remember...the more you know, the better equipped you will
be to make the right decisions!!
Source: http://www.ArticlePros.com/author.php?Liz M.Jarvis
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