It is time to apply for a mortgage, and the process can be confusing, frustrating, and overwhelming. There are so many steps involved and so many documents to be completed it can be hard to keep track of everything. Here is a guide to the dos and don’ts of getting approved for a mortgage, which will help you make sure you get the best mortgage that you can afford.
Do: Get preapproved. House hunting is difficult to do when you are not sure what you can afford. You often end up spending more than you need to or missing a home you really want because you are not sure you can afford it. Before you start looking for a property, get preapproved for a mortgage.
Do not: Go house hunting without knowing what you can afford. Choosing to buy a home is an exciting time. One of the most important steps is to determine how much you can afford to pay. That decision is usually the first step to your dream home, so it is important to be very careful.
Do: Work with home-buying professionals. There are many home-buying professionals out there who can help you in the buying process, but the reality is that you must work with a trained professional to get the best results. There are a variety of professionals that can help you in this process, but the most important are licensed real estate agents. You can try searching for an agent online, but you might want to give a local real estate agency a call first.
Do not: Think you have to do it alone. We recently were asked to look over the mortgage application of a client who had gotten married. Upon reviewing the application, we realized that this was a shining example of things not to do when applying for a mortgage. Unfortunately, many people make lots of mistakes with their mortgage applications.
The mortgage process is extensive and can take a long time for the average person to complete. Making sure you do not make any mistakes during this process is of the utmost importance. The best mortgage strategy is, to be honest about everything and, above all, to never lie to your lender. When you make a mistake, or say something that isn’t true, you could be hurting your chances of getting a mortgage or putting yourself in a position where you may not be able to make repayments in the future. If you are not comfortable with who you are working with, or the mortgage offer you receive, do not be afraid to look elsewhere.
One of the most common questions a real estate agent gets from buyers is when they are to call their lender and ask if they can pre-approve their application. The truth is that you should never call before your lender has officially sent you an offer. The reason for this is that pre-approvals are essentially based on an informal estimate of your credit score. This is where the lender assumes that you will be able to make the payments for a specific type of loan based on your credit history. How does this affect you? Well, it can affect the rate that you are offered, which then dictates how much interest you will be paying on top of the amount that has been loaned to you. As we have previously mentioned though, you are free to shop around and, if you don’t like an offer you have received, you are not obliged to accept it.
When it comes to your real estate transaction, you want to get the most out of your mortgage advisor and the most out of your real estate transaction. So, what should you do after you find the right person to help you?
If you are planning to apply for a mortgage, then you have to think about a few things. First, you need to know what type of mortgage you want to take out if you are going for a fixed-interest loan, a variable-interest-rate loan, or a hybrid loan. Second, you need to know what type of property is going to be used as security for the loan; a residential property, a commercial property, or a fixed-interest property. Third, you need to think about the amount of time you would like to be given in order to pay for the loan and consider things like how this may affect interest rates. Finally, you need to compare your offers and options, and make a decision as to which one you are going to choose to fund your new property!
Buying a property is one of the biggest purchases in anyone’s life, so getting it right is crucial. Mortgages enable you to fund this so that you can get the right property for the right price, and be able to continue to make the repayments each month. Just remember to do your research, be realistic about what it is you can afford, and, above all, don’t try and do it alone.