goal is to make finding the right loan easy. Our Home
Loan Experts make it happen!
are a number of steps to getting mortgage financing.
A particularly important step and one many people don't
give much thought to - is the credit check. As a routine
part of the application process the lender will order
a copy of your credit history.
getting a copy of your credit report before you apply
for a mortgage, you may be able to avoid surprises and
possible delays that may occur in having to answer questions
about your credit report. Because the report contains
information about you, you have a right to inspect a
copy of it. If you disagree with something in your credit
history you have the right to challenge it and ask that
the information be corrected.
pre-approved before you buy
pre-approval means that a lender has reviewed your credit
history, verified your assets and employment, and has
approved your loan before you have found a home to purchase.
As long as the home is valued for at least the purchase
price, the loan should be granted..Getting pre-approved
also gives you an advantage over other buyers. Your
pre-approval makes it easier for you to negotiate on
the price of a home, than a person who is not pre-approved.
getting pre-qualified may sound official, it is really
just getting an idea of what you can afford. Its having
a person punch in a few numbers that you give them -
your monthly income and your monthly debt - and getting
an approximate payment calculated. From the payment,
the calculator can approximate the house price range
that you can afford. No information is verified. Because
your assets, income or credit is not verified, a pre-qualification
has little value when purchasing a home.
a Buyer's Agent
the past, home buyers often assumed their real estate
agent worked in their behalf. After all, the agent showed
them lots of properties, called regularly to tell them
about new listings, wrote the offer to purchase, and
answered questions about mortgages and other issues
related to the sale. Buyers felt free to give confidential
information to an agent, unaware that it was the agent's
duty to pass the information on to the seller.
states require that agents disclose their relationship
as a seller agent or a buyer agent at the first substantive
contact, he explained. A good agent will explain this
early on, law or no law.
a buyer's agency, means the agent is working with your
best interests (and wallet) in mind. A buyer's agent
will work to negotiate the best price, ensure the property
is inspected, and make sure you have the representation
you need. Things you tell a buyer's agent remain confidential.
Using a buyer's agent also means that you will be shown
homes that are For Sale By Owner (FSBO).
might seem like using a buyer's agency means you are
going to pay more -- but that's not always the case.
Although there are situations where agents charge an
hourly fee, or a flat fee for the service, in most situations
they are simply working for the same commission that
is paid by the seller and split it with the seller's
about the Neighborhood
the house you find may be in a neighborhood that you're
not familiar with, which is OK. It just means that you'll
have to do a little more research.
you find a house that you like, ask for a list of the
neighborhood properties that sold in the last year.
How does your home rank? Is it at the top of the price
range? If so, it might be hard to resell. Is it average
or on the low end? If so, great - as the other home
prices go up in value, they will pull your home's value
up as well.
out the schools - are they sought after? A good school
district means your neighborhood will always be valued
by families which is a great reassurance to purchase,
not to mention the value-add if you have school-age
contact the police station and obtain crime statistics?
Are they acceptable to you? Sometimes, if they won't
give them to you, it could be a cause for alarm.
to the neighbors. The more people you talk to, the better
sense you will get of who makes up the neighborhood
and how they will effect your time spent in it.
out the location of the shopping, police and fire stations,
schools, and air traffic overhead. These are all things
that might affect your property value or quality of
a home inspection before you buy
a home is one of the most important investment decisions
you will make in your lifetime. As such, it makes sound
financial sense to enlist the services of a qualified
home inspection company to ensure your home is as solid
and secure on the inside as it is on the outside.
home inspection will determine the structural and mechanical
soundness of your home. Your home inspector will identify
existing and potential problem areas, suggest practical
low-cost solutions, and provide estimates regarding
costs for any work required. Shortly after the inspection
has taken place, a report summarizing the findings is
generally provided to the potential purchaser.
commissioning a home inspection prior to purchase, you're
protecting both yourself and your investment, as well
as buying a little peace-of-mind.
is a typical list of the documents you need when applying
for a mortgage. Your loan officer may request additional
documents based upon your situation.
for the closing costs
sales contract signed by buyers and sellers
Security numbers of all applicants
address for the past two years (including complete
name and address of landlords for past 24 months)
address, and all income earned from all employers
for past 24 months
two years' W-2 forms
recent pay stub showing year-to-date earnings
address, account number, monthly payment and current
balance for all loans and charge accounts
address, account number, and balance of all deposit
accounts, such as checking accounts, savings accounts,
stocks, bonds, etc.
months most recent statements for deposit accounts,
stocks, bonds, etc.
you choose to include income from child support and/or
alimony, bring copies of court records of cancelled
checks showing receipt of payment.
Your lender and closing attorney will also tell you
what paperwork and documents you will need to present
at the loan closing.
most common reason for refinancing is to save money.
Saving money through refinancing can be achieved in
obtaining a lower interest rate that causes one's
monthly mortgage payment to be reduced.
reducing the term of the loan, thus saving money over
the life of the loan. For example, refinancing from
a 30-year loan to a 15-year loan might result in higher
monthly payments, but the total of the payments made
during the life of the loan can be reduced significantly.
also refinance to convert their adjustable loan to a
fixed loan. The main reason behind this type of refinance
is to obtain the stability and the security of a fixed
loan. Fixed loans are very popular when interest rates
are low, whereas adjustable loans tend to be more popular
when rates are higher. When rates are low, homeowners
refinance to lock in low rates. When rates are high,
homeowners prefer adjustable loans to obtain lower payments.
third reason why homeowners refinance is to consolidate
debts and replace high-interest loans with a low-rate
mortgage. The loans being consolidated may include second
mortgages, credit lines, student loans, credit cards,
etc. In many cases, debt consolidation results in tax
savings, since consumers loans are not tax deductible,
while a mortgage loan is tax deductible.
answer to the question "Should I refinance?" is a complex
one, since every situation is different and no two homeowners
are in the exact same situation. Even the conventional
wisdom of refinancing only when you can save 2% on your
mortgage is not really true.
you are refinancing to save money on your monthly payments,
the following calculation is more appropriate than the
rule of 2%:
the total cost of the refinance: example: $2,000
the monthly savings: example: $100/month
the result in 1 by the result in 2: in this case 2000/100
= 20 months. This shows the break-even time. If you
plan to live in the house for longer than this period
of time, it makes sense to refinance.
Sometimes, you do not have a choice, you are forced
to refinance. This happens when you have a loan with
a balloon provision, but with no conversion option.
In this case it is best to refinance a few months before
the balloon comes due.
you choose to do, consulting with a seasoned mortgage
professional first can often save you time and money.
Our Home Loan Experts make the process easy from research
lenders check the credit of a loan applicant before
granting mortgage loans. The lender determines whether
the applicant has good or bad credit. Before we discuss
the components of good credit and a good credit rating
score, we should first define the terms "credit" and
- The right granted by a creditor to pay in the future
in order to buy or borrow in the present.
scoring - A method, based on statistical analysis
of applicant characteristics, through which lenders
determine the applicant's qualification for credit.
Many creditors use a credit rating score to help determine
whether or not to grant credit to an applicant.
lender relies upon credit bureaus to supply them with
these credit scores. The 3 credit report agencies primarily
used are Trans Union, Equifax, and Experian. According
to the Federal Trade Commission Site on Consumer Issues
, the credit-scoring characteristics include an applicant's
bill-paying history, the number and types of accounts
she/he has, the age of the accounts, and outstanding
debt.Generally, someone with a good credit rating score
is said to have good credit.
is a good credit rating score? Lenders typically
base their lending decision upon one of three scores.
They obtain one score each from Equifax, Experian, and
Trans Union and ignore the highest and lowest scores
and rely upon the middle score. Most people are between
500 at worst and 850 at best. Anything over 680 is good
- they will have no trouble getting a loan. Some lenders
consider "good" to be as low as 620. Over 700 is considered
lower the score, the harder it will be for applicants
to find loans at fairly low interest rates. Usually
lenders want to be compensated for "higher risk" loans
and so charge higher mortgage interest rates.
factors other than credit score rating considered?
Yes. While the credit scores are useful because they
are based upon a combination of factors, such as whether
a person makes payments on time every month and how
much income a person is using to pay off debt on credit
cards, student loans, and auto loans, the lender does
not see just a score and judge applicants based on the
score number alone.
consider all the characteristics, as discussed below.
Many creditors rely on the three "C" factors of credit
when deciding whether to grant credit for mortgages.
They consider the applicant's capacity, capital, and
character. As it turns out, the credit scores are based
on these three factors anyway. Therefore, an explanation
of the three "C" factors will also explain the factors
that go into a credit score. Someone who has good capacity,
capital, and character has good credit and therefore
a good credit rating score.
- Your ability to make payments on time for as long
as you owe money. The amount of time you have held
a steady job, your salary, and the amounts you owe
to other creditors all have an impact on this decision.
Capital - The money in your bank accounts as
well as the value of your stocks, your boat, and your
house are considered capital. Most creditors like
to know you have the ability to repay the loan through
the sale of an asset in case you become unable to
work and run out of savings.
- How good (or bad) you are at keeping your promises.
In other words, your willingness to make payments
for the right amount at the right time.
are these three Cs obtained? The information is
obtained from both the borrower's application form and
from credit reports issued by credit bureaus. Every
time you pay a bill, whether it's on time, late, or not
paid at all, the transaction is recorded on a credit
report. This report will show how you pay your monthly
car loan payments, mortgage, rent, utility payments,
How do I know if my credit and/or credit score will
allow me to get the loan I want? The answer
can vary based upon your situation. Our loan consultants
are very experienced at analyzing borrower's credit
information and providing expert advice.
look at your credit scores when you're buying a home, purchasing
a car, and to determine whether to loan you money for nearly
all other credit applications. Before lending you money, creditors
want to determine how much of a risk you are, how likely you
are to repay the money.Credit scores help them do that, and
the higher your score, the less risk they feel you'll be.
increases to your credit scores take place over time and require
an ongoing effort from you. The only true credit score quick-fixes
are to pay down debt and to successfully dispute negative
information on a credit report.
scoring software looks at five areas of your credit reports:
of Your Credit History
of Credit Used
can improve your credit scores by taking a hard look at your
credit reports and charting a plan of action.
Your Payment History
pay your bills on time. Late payments play a major role
in driving down your score.
you're already late, get current and stay that way.
your creditors as soon as you know you will have a problem
paying bills on time. Try to work out a payment arrangement
with your creditors and negotiate with them to keep at least
a portion of the late notations off of your credit reports.
towards developing an ongoing track record of paying on
your situation is serious, see a legitimate, non profit
the scam artists who promise a quick reversal of your credit
Your Amounts Owed
your credit card balances low. High debt-to-credit-limit
ratios drive your scores down.
off debt, don't move it around. Owing the same amounts,
but having fewer open accounts, can lower your score if
you max out the accounts involved.
close unused accounts--the zero balance might help your
open new accounts that you don't need as a quickie approach
to altering your debt-to-credit-limit ratios. That can lower
Length of Your Credit History
is the only thing that can improve this aspect of your scores,
but you can manage it wisely.
open several new accounts in a short period, especially if
your credit history covers less than three years. Adding accounts
too rapidly sends up a red flag that you might not be able
to handle your credit responsibly. Several credit inquiries
during a short period probably means you are attempting to
open multiple new accounts.
Credit scoring software recognizes when you are shopping for
a single loan within a short period of time (such as a home
loan). If multiple inquiries are necessary, have them pulled
your own credit report does not affect your scores when you
order the report from the credit reporting agency or an organization
authorized to provide credit reports to consumers.
to open a few new accounts if you've had credit problems in
the past. Pay them on time and don't max out your credit limits.
A mixture of credit cards and installment loans can help raise
your score if you manage the credit cards responsibly.