I know applying for a home loan can be frustrating and long. But knowing a few pointers about the entire process will definitely help ease it a bit. If you are having trouble finding ways to get a mortgage loan and are at your wits end, then this blog post is just what you need. Below, I am going to give you my top 10 tips on getting a home loan.
If you're even thinking of applying for a home loan, start planning at least 6 months before you apply for it. More time can be taken if needed but 6 months should really be the minimum. This should be enough time to clean up credit scores, at least as much as you can since some things cannot be repaired.
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It's important to figure out if you will be able to purchase a home even in a cheap place, even with a loan. You'll need to take into consideration all your income, where the down payment is going to come from, how monthly payments will be made, and what other costs will pop up. You'll also have to think about everything that goes with a house: taxes, insurance, cable, garbage pick-up, and utilities. There's always the everyday stuff as well; emergency car repairs (What if you end upneeding a new car?!),groceries, and other necessities...even toilet paper!
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There are going to be closing costs, lender fees, and possible other hidden fees for you to pay. They won't be hidden if you find out up front what they all are. Write them down so you don't forget to consider them while taking your decision. You are often able to negotiate some fees that the lender charges, but you won't know unless you ask!
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You never know how extensive this process might get, so it's a good idea to employ a lawyer for the process. Some people choose not to use a lawyer at all, but have one in mind, just in case you come across something that seems sketchy. It's better to be safe, than sorry, as the old adage goes.
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There is a lot of paper work included in the whole home loan process. I can give you an idea of some of what you might need, but you should get a complete list from the lender. Documents needed: bank statements, W2 forms, pay stubs, driver's license, social security card, car title, statements from any Mutual Funds, Stocks, or IRA accounts. Recent college graduates will need transcripts and if you've had to file for bankruptcy in the past, you must have a copy of that paper work as well.
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Try talking to people who have applied for home loans, just to see what they have to say about the whole process. You can probably get a lot of information from people that have gone through this and maybe even pick up a few pointers. I bet they will have a bunch of insider tips for you and will be more than willing to help you out.
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There are some ways to boost credit ratings. Pay off credit cards. Be sure to pay bills on time. Even taking out a small loan and paying it off quickly is a way to bring up your score. If your credit is too bad, there's often no hope of getting a loan. It just makes you look too much like a liability.
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It's always a good idea to check out your credit report for yourself. There is always the possibility that a loan was left on there when it was actually paid off. It happened to me and I had to dispute it. I showed the pay off papers for the loan and it was then taken off of my credit rating. It boosted it up quite a bit, since the loan was from many, many years ago. If you do find an error on your credit report and you can prove that it is an actual error, dispute it right away! This is the only way it will quickly be taken off of your report, thus bringing up your score.
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Knowing which lenders are reputable and which ones only claim to be is beneficial for you. It's a horrible feeling to get all ready for the whole process, only to find your dreams being crushed by a company that was only out to get your money. Get plenty of references and check the Better Business Bureau to make sure the lenders you are thinking about applying with don't have any complaints against them.
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It's a good idea to check, double check, and triple check all information that is put onto the home loan application. It would stink to have the loan rejected because of one little mistake, that could have quickly been corrected. It's such a long process, you wouldn't want to have to do it twice in a row!
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I hope you find these 10 tips very useful and haven't been scared off about the whole home loan process. There is a lot to remember to do when applying, but being organized about the entire deal is the best way to go. I'm sure you won't have to do it alone, as there is always someone who's able to help out and provide their knowledge in this area. Have you gotten a home loan or a mortgage recently? What tips can you share?
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