HouseBuyingTips
© 2010  Janice C. Tatum and Associates, All Rights Reserved     Terms of Service   Privacy Policy
Getting a mortgage may take longer under new rules So much for timelyness in the mortgage industry. Now it will take longer to get your mortgage. The goal is to make the mind- numbing mortgage process much easier for consumers to understand. It's called Know Before You Owe, which sounds simple enough. The means to that goal, however, is all-new paperwork and disclosure rules for lenders that went into effect this past Saturday and which some say could delay the mortgage process and cost consumers cash. The standardized forms spell out exactly how much a borrower must pay for closing costs and how much each monthly payment will be as the loan ages and potentially adjusts, right up until its term ends. Borrowers must get these new, standardized forms at least three days before closing on the loan, which is a shift from previous standards, which allowed changes to be made on a loan right up to and even during the closing. Mortgage application process Peter Dazeley | Getty Images "I think that's a big one because consumers have been complaining about this left and right because they would get to the signing table and suddenly everything would change," said Jason van den Brand, CEO of Lenda, an online mortgage refinance company operating in Washington, Oregon and California. "So you get quoted something and the loan gets locked, and you get to the closing table and suddenly the rate has gone up by a quarter percent, your fees have gone up $10,000 and you're sitting there scratching your head going, what just happened?" This is another outgrowth of the Dodd-Frank law, passed in 2010, designed to hold lenders accountable and protect consumers against what happened during the last housing boom. Back then, lenders offered borrowers loans with complicated terms, adjustments and penalties, without having to fully explain them. Yes, getting a mortgage is a time consuming process, and now it will even take longer.

Tips That Will Help

You Secure the Best

Mortgage Possible

You cannot just sit on your couch and secure a loan that is great. Dreaming of a smooth house buying journey without taking concrete steps does not really work. Any big decision requires good action on your part, and getting a mortgage is no different. If you have been wondering how you can get a good mortgage, the following tips will make the job easier:

Prepare a budget

Understanding how much you can spend is really important. Without knowing that, you cannot reliably decide what type of a house you can truly afford. In order to figure out what your budget should be, consider your income, present debts, down payment savings, and estimated living expenses. After that open realtor.com on your browser and calculate what your monthly mortgage payment should be. Vary the rate of interest back and forth to have a good feel for how interest can make a difference when it comes to determining your monthly payment. Keep in mind that it is best to not allow your monthly mortgage payment to exceed 43 percent of your income.

Consider all your options

The kind of house you want to purchase and to what extent you require external assistance will determine the kind of loan you can get. For instance, in case you are a veteran, you may consider securing a VA, or Department of Veteran Affairs, Loan. Perhaps you have good credit and you have never bought a house before? Going for a FHA, or Federal Housing Authority, loan may be a good idea. You need to put only 3.5% down payment to secure a FHA loan, and also, you can get very competitive interest rate. If your heart wants a really expensive house, then choosing a jumbo loan may be your best bet.

Decide if you need help

To secure a mortgage, you can either deal directly with your lender, or seek help from a broker who deals with house mortgage. Embarking on the solo path requires you to do a lot of legwork, including considering different lenders, comparing rates of interest, and figuring out loan terms. However, with the help of a trustworthy mortgage broker, you can relax a bit and let the broker do all the work for you. That is, in exchange of an additional 1 or 2 percent interest, of course! If you have a knack for researching different loans and finding out helpful information, going solo may work out alright. However, if too much work makes you fearful and confused, finding a reliable broker will be the better option.

Examine your credit

Every year, you can legally obtain a free credit report from Equifax, Experian and TransUnion each. Visit annualcreditreport.com, get your credit report, and check for any inconsistency. If something does not add up, get it corrected.

Take care of paperwork

You must be able to provide enough proof to back up all the numbers associated with your financial profile. Do you have an ongoing bank account with statement extending at least six months? Be prepared to show the same to your lender. Did you recently send someone money? Get ready to explain the reason. Collect two government identification forms, tax returns for two years, income statements for the past two years, and asset proofs for everything you own. If you can get your paperwork right in your first attempt, you will be miles ahead of others in a similar position.

Get pre-approval

Pre-approval does not guarantee that you will secure a loan. However, you can see it as a kind of diploma! That is because during the pre-approval process, your lender is sure to do your credit check and scrutinize your income and debt to understand your financial capacity. To secure the best deal you can, before finalizing your pick, be sure to consider three different lenders at the very least.
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HouseBuyingTips
© 2010  Janice C. Tatum and Associates, All Rights Reserved     Terms of Service   Privacy Policy
Getting a mortgage may take longer under new rules So much for timelyness in the mortgage industry. Now it will take longer to get your mortgage. The goal is to make the mind-numbing mortgage process much easier for consumers to understand. It's called Know Before You Owe, which sounds simple enough. The means to that goal, however, is all-new paperwork and disclosure rules for lenders that went into effect this past Saturday and which some say could delay the mortgage process and cost consumers cash. The standardized forms spell out exactly how much a borrower must pay for closing costs and how much each monthly payment will be as the loan ages and potentially adjusts, right up until its term ends. Borrowers must get these new, standardized forms at least three days before closing on the loan, which is a shift from previous standards, which allowed changes to be made on a loan right up to and even during the closing. Mortgage application process Peter Dazeley | Getty Images "I think that's a big one because consumers have been complaining about this left and right because they would get to the signing table and suddenly everything would change," said Jason van den Brand, CEO of Lenda, an online mortgage refinance company operating in Washington, Oregon and California. "So you get quoted something and the loan gets locked, and you get to the closing table and suddenly the rate has gone up by a quarter percent, your fees have gone up $10,000 and you're sitting there scratching your head going, what just happened?" This is another outgrowth of the Dodd-Frank law, passed in 2010, designed to hold lenders accountable and protect consumers against what happened during the last housing boom. Back then, lenders offered borrowers loans with complicated terms, adjustments and penalties, without having to fully explain them. Yes, getting a mortgage is a time consuming process, and now it will even take longer.

Tips That Will

Help You

Secure the Best

Mortgage

Possible

You cannot just sit on your couch and secure a loan that is great. Dreaming of a smooth house buying journey without taking concrete steps does not really work. Any big decision requires good action on your part, and getting a mortgage is no different. If you have been wondering how you can get a good mortgage, the following tips will make the job easier:

Prepare a budget

Understanding how much you can spend is really important. Without knowing that, you cannot reliably decide what type of a house you can truly afford. In order to figure out what your budget should be, consider your income, present debts, down payment savings, and estimated living expenses. After that open realtor.com on your browser and calculate what your monthly mortgage payment should be. Vary the rate of interest back and forth to have a good feel for how interest can make a difference when it comes to determining your monthly payment. Keep in mind that it is best to not allow your monthly mortgage payment to exceed 43 percent of your income.

Consider all your options

The kind of house you want to purchase and to what extent you require external assistance will determine the kind of loan you can get. For instance, in case you are a veteran, you may consider securing a VA, or Department of Veteran Affairs, Loan. Perhaps you have good credit and you have never bought a house before? Going for a FHA, or Federal Housing Authority, loan may be a good idea. You need to put only 3.5% down payment to secure a FHA loan, and also, you can get very competitive interest rate. If your heart wants a really expensive house, then choosing a jumbo loan may be your best bet.

Decide if you need help

To secure a mortgage, you can either deal directly with your lender, or seek help from a broker who deals with house mortgage. Embarking on the solo path requires you to do a lot of legwork, including considering different lenders, comparing rates of interest, and figuring out loan terms. However, with the help of a trustworthy mortgage broker, you can relax a bit and let the broker do all the work for you. That is, in exchange of an additional 1 or 2 percent interest, of course! If you have a knack for researching different loans and finding out helpful information, going solo may work out alright. However, if too much work makes you fearful and confused, finding a reliable broker will be the better option.

Examine your credit

Every year, you can legally obtain a free credit report from Equifax, Experian and TransUnion each. Visit annualcreditreport.com, get your credit report, and check for any inconsistency. If something does not add up, get it corrected.

Take care of paperwork

You must be able to provide enough proof to back up all the numbers associated with your financial profile. Do you have an ongoing bank account with statement extending at least six months? Be prepared to show the same to your lender. Did you recently send someone money? Get ready to explain the reason. Collect two government identification forms, tax returns for two years, income statements for the past two years, and asset proofs for everything you own. If you can get your paperwork right in your first attempt, you will be miles ahead of others in a similar position.

Get pre-approval

Pre-approval does not guarantee that you will secure a loan. However, you can see it as a kind of diploma! That is because during the pre-approval process, your lender is sure to do your credit check and scrutinize your income and debt to understand your financial capacity. To secure the best deal you can, before finalizing your pick, be sure to consider three different lenders at the very least.