Do you plan to do all of your research for the best home financing choices, submit a home financing application, and get approval all on the Internet? This article details the process on just how to go about home financing research, how to shop appropriately, and how uncover the greeneasylife.com best loan deals on the Internet.
Set your mortgage goal with a clear and concise objective in mind. With this first step done, you will know your financial capabilities, monthly payment ability, and maximum loan amount you can conceivably qualify for. It is a good idea to also consider how long you plan to keep the property because there are different mortgage options for short term and long term ownership that will be beneficial to you.
Credit Reports & Scores:
Before you set out to shop online mortgage lender options, you should consider paying for a "tri-bureau merged" credit report with scores included. This is a very important document that the lender will require in order to process your loan. Credit agencies are obliged to give you one free credit report every year. However, this free report won't hold the coveted credit scores nor will it be a "tri-bureau merged" report. Once you get the report check it very carefully to make sure all the information recorded is accurate. Check your "middle score" and see if you have a good enough score to obtain the mortgage you'd like. These three scores can be compared with your lenders credit score to be sure they got the right report.
Using your credit score online to get quotes is a matter of just inputting your estimate of your score with words like "excellent", "good", "fair", or "poor". I'll give my estimation as a score between 750-850 as "excellent", 650-750 as "good", 550-650 as "fair", and finally below 550 as "poor". You don't need a credit score to complete these online forms. You can estimate your score without actually knowing it the following way: Never made a late payment in the last two years = "excellent", a few late payments in the last two years = "good", made as many late payments as on time payments in the last two years = "fair" and if you made more late payments than not in the last two years = "poor".
Financial Documentation:
Gather all your financial documentation like bank statements, pay stubs, tax records, etc. You are going to need this information when getting online mortgage quotes. You should already have a rough calculation of how much your household makes before taxes every month and how much your debt obligations cost you monthly as well.
These two figures are used to calculate your Debt-to-Income (DTI) ratio. This ratio needs to be below 38% to get the best rates and programs. Here's how to estimate this for yourself. For example, you make $3,000 gross per month and your spouse makes $3,000...a total of $6,000 gross income per month. Now let's say you have two car payments equaling $500 per month and a credit card with a minimum payment of $150 a month. Now let's say you are looking at a home mortgage with a PITI payment of $1500 per month. Your total debts with this anticipated mortgage payment is now equal to $2,150 a month.
Your Debt-to-Income ratio is then $2,150/$6,000 = 35.83%...inside the 38% max DTI.
Don't apply for a mortgage so large that your DTI exceeds 38%. You are asking to get denied. Know your DTI BEFORE you apply and stay under the 38% limit!
Along with DTI, you'll need to know your LTV or Loan-To-Value. If you are buying a home, you'll also need a down payment number to a Loan-to-Value can be calculated. For example, if you are buying a home for $100,000 with a $10,000 down payment, the Loan-to-Value is 90%. Now a day, applying for a purchase loan above 95% is asking to be denied. If you are refinancing paying off a second mortgage or other debt, applying for a mortgage above 90% is asking to be denied.
Know your LTV and don't apply for mortgages at too high LTV's...you'll just be denied.
Getting Online Mortgage Quotes:
Now you are ready to start trawling the internet in search of greeneasylife.com mortgage loan quotes. The online lenders ask basic questions covering income, credit rating, loan amount, etc. and provide quotes very quickly, based on your information. Once you have your quotations lined up you can start comparing them to draw up a list of potential mortgage lenders that you wish to consider. You need to be aware that the mortgage rates will depend on various factors such as property location, credit scores, and Loan-to-Value as well as market forces.
Mortgage Quote Comparison:
With the detailed online mortgage quotations in hand start comparing what each lender has quoted. Remember to pay attention to the lender's fees as well as the rate. Be sure each quote is reflecting the same amount of discount points as discount points are used widely to obfuscate higher than normal rates. Try to get all your quotes on the same day and on the same loan program so each lender gives you something you can compare without variation.
For example, on the same day you get 4 quotes on a 30 year fixed conventional loan with no points. Then once you get all 4, you can compare the rates and the costs. You've limited what you must compare. It makes it easier to pick the quote with the lowest rate and costs. If all the quotes come back at 5% for example, now you just pick the lender with the lowest closing costs. If 2 come back at 5% and 2 at 4.75%, you'll look at the costs of all 4 and if you have equal closing costs, you pick the one with the lowest rate.
Converting a Quote to An Application:
Complete the online formalities with the lender you have picked. Most lenders have online application services, so contact the lender, discuss you loan quote with a loan officer and determine how you will convert your quote to an application. Once the online application is run through an automated approval system, you'll be issued a "pre-approval". With a pre-approved greeneasylife.com mortgage loan in hand you are ready to start the buying process. The online lender will send you the paperwork to be reviewed, signed and returned along with supporting documentation. Final approval usually takes a few weeks after receiving this paperwork.
I trust we have made the process of loan shopping, comparing rates, applying, and getting final approval all on the Web a rapid, simple process to understand and put into practice. With these tips, I know you'll increase your chance of getting a good deal and give you a relatively hassle-free experience as well.
Rob K. Blake, mortgage expert and author, educates mortgage shoppers on all topics in the mortgage industry. Click on the links to read more about the themortgageinsider.net/mortgage-review/academy-mortgage-corporation-review.html Academy Mortgage Review and the themortgageinsider.net/mortgage-review/pacific-mercantile-bank-mortgage-review.html Pacific Mercantile Bank Mortgage Review.
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