Affordability, type of loan payment, and load approval are key factors when it comes to borrowing money or loan advice. Always make sure you do your own research and talk/meet with several well-known or reputable mortgage lenders.
The best approach you choose in moving forward with achieving loan approval and the most economic payment plan will be determined by what type of borrower you are. Credit rating, credit history, employment status, current and past relationship with lending institutions, and your debt-to-income ration are all factors that go into how creditors rate your strength as a borrower. These are the factors that go into deciding what type of borrower you are and your best strategy to obtaining a mortgage loan.
Have excellent credit? Low income-to-debt ratio? Access to the proper financial documents? Long-time employment with same employer?
If you answered yes to these questions, then your chances of being met with a loan approval from almost any lending institution (broker, bank, e-lender or internet lender, local credit union, etc.) are fairly good. When it comes to negotiating the best mortgage rates, all of these factors go into determining your power as a borrower.
[Original article has link here about being self-employed]
Some who are self-employed prefer to keep their income and assets private or not available information to the mortgage lender. If this is your circumstance, the best advice is to search out a reputable mortgage broker, who will act on your behalf as an intermediary between you and the lending institution, between home buyer and mortgage lender. Often times, mortgage brokers have access to resources, like a network of contacts who have access to various unadvertised home loan options, not directly reserved for other consumers.
Reminder: even if you are financially astute or a repeat homebuyer, it’s always a good idea to do your due diligence… research. And, it’s always an option to shop online for a mortgage lender, as mentioned above, an E-Lender or Internet Lender (“E” is for Electronic).
Go to resources and relationships you have already established, like your local financial institution. If you have a history with them, having several different accounts (credit cards, various loans, saving, checking, business accounts, etc.), you might get the best deal in negotiating your mortgage through them. At the very least, reach out and seek advice from these established relationships.
For those convenience shoppers who are not interested or concerned with cost and simply want the fastest and easiest home loan out there, you can also work out a mortgage through a real estate agency and some home builders. Your real estate agent can help point you in the right direction.
If you want to pay down your mortgage loan as quickly as possible, of course, making a larger (the larger the better) down payment and take on a shorter repayment term (instead of a 30-year, go with 10-15 years).
To help you avoid the cost of Private Mortgage Insurance (PMI), you will want to make a larger (e.g., 20%) down payment. Or, if the purchase price of your home is considerably less then the fair market value, you might not have to purchase PMI. Overall, PMI is often times only obligatory until the home loan amount is 80%, or less, than the asset’s market value.
[Another link to another article]
Another piece of mortgage advice to consider is how long you plan on occupying your home, as this will help determine if you want a fixed-rate mortgage (FRM) or an adjustable-rate mortgage (ARM). FRMs perhaps have higher payments in the first few years and the payment do not increase over time, whereas ARMs typically have lower initial monthly mortgage payments, and often times can become higher as the loan term matures.
As the title indicates, a fixed-rate mortgage typically has an interest rate that does not change through the life of the loan, hence “fixed” or stationary or non-changing/variable. Some exceptions might be if you have consolidated any non-fixed expenses into your mortgage payment, like property taxes or homeowners insurgence.
If you plan on staying in your home for a minimum of 7 years, it is often good mortgage advice to go with a fixed-rate mortgage with affordable, regular monthly payments. Fixed mortgage rates are often time more straightforward or less complicated than are adjustable-rate mortgages. Sound mortgage strategies can be as complex or as simple and straightforward as you choose.
So, you have many different options available to you to help the quick pace and potential changes in income, and as stated a few times now, your best mortgage advice will always be to do your due diligence. Research all of your options before you put your name on the dotted line and sign a lender’s contract. The more knowledge and understanding you have, the greater chances of success in finding the best home mortgage loan for your needs.
