How to Get the Best Mortgage Plan?
Nov 15, 2016 Home Loan
With the recent boost in the real estate market, many first time home buyers must be planning to invest in a real estate property. But many of you must be having wary feels about the mortgage plans.
In order to make you feel more confident, here are few tips.
Get your Credit Report Done:
Based on your credit score the lender will determine whether you are qualified for the loan and what should be the rate of interest. After you get your credit report, get it reviewed by a credit agency so that there are no errors. Only after completing this step you should apply for a loan.
Increase your Debt-to- Income ratio:
Debt-to-Income ratio means the ratio between the amount of money you earn versus the amount of money you have to pay in the form of loans and debts.
Lenders do consider this ratio when you are applying for a new loan. The tip to improve your debt-to-income ratio is by making bigger payments on the credit card and by clearing all your outstanding loans. This will make you a more desirable candidate.
A Bigger Down-payment is better:
In order to get bigger loans, smaller interest rates and more attractive closing fees you should pay a big down-payment. This also improves your property’s loan-to-value ratio.
Fixed or Hybrid Mortgage:
If you are planning to stay in your new house for only a few years, opt for the hybrid mortgage. This will reduce your interest rate by 1%. But in the meanwhile, if your mind changes and you decide for a longer time in that house, your interest rate might increase which might affect the value of your house as well. But if you have no such plans, you can happily avail the traditional 15-30 year mortgage option.
Look for the Right Lender:
The best way to find the best possible mortgage is by selecting the best possible lender. This can be done by requesting online quotations from local lenders and providing each one with your information. You can compare the rates that they would send you back. Then you can shortlist them and personally talk with them.
Thoroughly Complete the Application:
After you have selected your lender, thoroughly fill the application form. Your lender will surely help you. But you have to be ready with all the documents like tax returns, pay stubs, bank statements and real estate contracts.
Locking the Internet Rate:
This is the final stage where you sign your mortgage papers. If you are happy with your interest rate, you can immediately lock in after filling up the application form. But if you are not completely sanguine, you can opt for a floating rate. In this case, your rate fluctuates with the market rate unless you close it. This is very risky because the market rate might shoot up as well.
With the help of the above mentioned tips, getting the best mortgage should not be a fretful job anymore.
In order to make you feel more confident, here are few tips.
Get your Credit Report Done:
Based on your credit score the lender will determine whether you are qualified for the loan and what should be the rate of interest. After you get your credit report, get it reviewed by a credit agency so that there are no errors. Only after completing this step you should apply for a loan.
Increase your Debt-to- Income ratio:
Debt-to-Income ratio means the ratio between the amount of money you earn versus the amount of money you have to pay in the form of loans and debts.
Lenders do consider this ratio when you are applying for a new loan. The tip to improve your debt-to-income ratio is by making bigger payments on the credit card and by clearing all your outstanding loans. This will make you a more desirable candidate.
A Bigger Down-payment is better:
In order to get bigger loans, smaller interest rates and more attractive closing fees you should pay a big down-payment. This also improves your property’s loan-to-value ratio.
Fixed or Hybrid Mortgage:
If you are planning to stay in your new house for only a few years, opt for the hybrid mortgage. This will reduce your interest rate by 1%. But in the meanwhile, if your mind changes and you decide for a longer time in that house, your interest rate might increase which might affect the value of your house as well. But if you have no such plans, you can happily avail the traditional 15-30 year mortgage option.
Look for the Right Lender:
The best way to find the best possible mortgage is by selecting the best possible lender. This can be done by requesting online quotations from local lenders and providing each one with your information. You can compare the rates that they would send you back. Then you can shortlist them and personally talk with them.
Thoroughly Complete the Application:
After you have selected your lender, thoroughly fill the application form. Your lender will surely help you. But you have to be ready with all the documents like tax returns, pay stubs, bank statements and real estate contracts.
Locking the Internet Rate:
This is the final stage where you sign your mortgage papers. If you are happy with your interest rate, you can immediately lock in after filling up the application form. But if you are not completely sanguine, you can opt for a floating rate. In this case, your rate fluctuates with the market rate unless you close it. This is very risky because the market rate might shoot up as well.
With the help of the above mentioned tips, getting the best mortgage should not be a fretful job anymore.
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