A house is not just a structure. It is a place that can be filled with irreplaceable and priceless memories. It is where a couple builds a family and a haven. But apart from the purpose of a house, another important consideration is the price.
Houses don’t come cheap. Even a small structure with very basic facilities can sell for tens of thousands of dollars, especially if it is in a prime location; and not a lot of people can afford to pay for the full price of a house in just one financial transaction. This is where mortgages become crucial. With a mortgage, a couple hoping to start their life together or even a person who dreams to have his place can make his wishes of having a home come true.
What’s a Mortgage?
Generally, someone who wants to buy a home will get a residential mortgage application. Here, the person borrows money to purchase a residence, and the collateral used is the house bought. An individual can get a mortgage from a bank or a private financial institution, and in case that person fails to pay monthly mortgage fees, the entity that provided him the money has the right to seize the property. A bank, for instance, has the right to evict residents and sell the property to cover its losses.
Knowing Your Lender
In the past, it can be a bit easier to get a mortgage approved. Just make sure that you have enough money in the bank, a good and well-paying job, as well as a good credit score, and you’ll most likely get approval in a cinch. These days, however, it’s harder to get approved for a mortgage.
Financial institutions are being more cautious, and even though you might possess all the requirements needed, your mortgage might not be approved. But there are also a few things that you can do to make things lean in your favor. Here are some things to consider.
It’s very helpful to get to know your lender well. This way, you’ll know better what sort of requirements or characteristics a lender is looking for. By being aware of such elements, you’ll be able to tailor your application in a way that will most likely satisfy that specific lender. If you get rejected, don’t lose hope. You can go about rejection in two ways.
First, you could request an exception. This is like asking someone else from the same financial company for a second opinion. Here, you’ll need to compose a formal letter as regards why you are requesting the exception and point out facts that could’ve negatively influenced your application. You should stick to the financial facts. The second way is to look for another lender.
One lender may reject you, but know that many others could also approve your application. But learn from your mistakes. If the first lender you approached rejected you, ask him a couple of questions about why or what factors convinced him to reject the application so that you can make the necessary changes before approaching another lender.
Comparing Mortgage Loans from Different Lenders
So you have finally decided to purchase a home to accommodate the needs of your growing family. However, the cash you have at hand is not enough to cover all the associated expenses. Perhaps, there is no better way to finance your dream property than applying for a mortgage.
However, before you go ahead and apply for a mortgage loan, it is worth your time comparing loan packages or programs from different lenders for you to arrive at an informed choice and at the same time land a sweet deal. Below are some tips on how you can compare mortgage loan packages or programs from different lenders.
Know what you want
The key to securing a mortgage is to know what you want to get from it. For example, are you willing to be locked in a 30- or 15-year fixed rate because you intend to live in the house for long? Or, perhaps you want to start with a lower upfront rate because you do not have the intent to stay too long in the house? It also pays to know how much you can realistically pay for the monthly mortgage fees without worrying that you will encounter trouble later on. Knowing these things will allow you to compare similar loan types from multiple sources.
Understand your options
The mortgages available for consumers like you are numerous. Some are specifically made from first -time buyers, while others are suitable for people planning to switch their current mortgages. Knowing the options that you have will allow you to know what are the benefits and risks for each type, and if they will complement your needs.
There are two basic types of mortgages: repayment and the so-called interest only. A repayment mortgage is where you will pay a fixed amount every month for a set period until you can completely settle the loan as well as the interest. On the other hand, interest-only mortgage involves month repayments for a set period, but the payments will only provide coverage to the interest of the loan. With this kind of mortgage, you will have to pay off the rest of the loan once the term ends using another savings or investment plan.
Look at the features
When comparing mortgage products, it is important that you thoroughly investigate all their features and other associated costs. These include application fees, prepayment penalties, applicable overall annual percentage rate, initial interest rate, and insurance payments (if there are any) just to name a few. Determining these things will give you an idea of which mortgage loan program is ideal for your situation.
The truth is, shopping for a mortgage, especially if you are a first-time buyer. However, if you want to make sure that you will get the best mortgage product that will suit your needs, it pays to do your homework and this includes doing comparisons. If you educate yourself about mortgages and the options available, you can make an informed choice that will surely give value to your money.
If you are looking for mortgage advisors west Lothian services, Financial Wise is your go-to company. They provide the right quality of advice and excellent solutions for a wide variety of financial needs. The article above was written by one of the company’s regular contributors.
Lower Mortgage Rate Starts With Getting The Right Loan Officer
When comes to choosing a loan officer, most people are getting to know one through advertisement. When a lender’s name is being familiar by the majority, it stands a very high chance for people to choose it as people always feeling safe with familiarity.
Therefore, you can see a lot of loan companies doing a lot of advertising in order to get familiar with the people. If you want to apply for a loan, you can just get the most familiar loan lender but make sure that the lender is offering you the best mortgage rate.
Always Go With Well-Known Loan Officer
The interest rate for your mortgage is actually evaluated based on your risk level and risk position determined by the loan company.
Generally, your loan company is able to negotiate with the bank or the lender on how well are you willing to make your repayment on the loan. Therefore, you would more preferable to go for a loan officer who is more familiar with you rather than goes for someone you have no clue at all.
Do you still remember when was the last time a loan officer offered a superb interest rate for your mortgage loan? When was the last time a loan officer dealt with you with due respect? All of these are rather important issues. They have a tendency to be this giant threat within our day-to-day lives for the reason that we need the service from them.
Most of the loan officers typically fail to remember that they also need customers just as much as customers need them. A mortgage loan can be a big deal for most households, and they deserved to treated with good service.
However, nowadays it is very rare to find a loan officer who can understand that a good interest rate for a mortgage is important for customers. If you happen to look for a loan officer, you shouldn’t simply find anyone from the yellow pages or choose for the latest lender who advertises on the TV.
You should get the one who is willing and is capable to offers you what you need. The interest rate for your mortgage can be straightaway determined by which loan officer you decided to go for your mortgage loan. Therefore, you should treat this seriously when come to look for a loan officer.
An ideal loan officer must be able to offer you the loan that meets your requirement. You may need to pay full attention in order to comprehend all the terms and conditions for a particular loan. The time you go for a loan officer, you have put in confidence in him and fully depend on him for getting the best deal.
If the loan officer offers you a loan at a low rate, you are going to have a brighter financial future. And to contrast, it also may well apply if the loan officer offers you a loan with a significantly high rate. Needless to say, have confidence in someone is the most valuable asset the time you pick your loan officer.
Even if your loan officer guarantees you that the loan you applied from the company is having the lowest rate in the mortgage industry, but how can you figure out he is not lying to you? So, the knowledge for choosing a trustworthy actually depends on you. Once you get an ethical loan officer in which you can put your faith onto him, then you are very likely to receive a loan with the lowest interest rate that best suits your needs.
Heed For Choosing the Right Loan Officer
Please don’t simply choose for a mortgage that your sister in law has been bragging to you all the time. You need to know that your risk level and credit score also plays a part in your mortgage rate. Sometimes you are having difficulty getting a mortgage is due to your credit score or the loan which you are required simply does not qualify for the lowest mortgage rate.
And this may not has anything related to some bills that pending for you to pay or some unpaid product that you need to settle. The time when you apply for a mortgage loan, a credit inquiry is automatically put on your credit regardless of whether you had been accepted or not.
If you surf on the internet and come across some mortgage loans that you are interested to apply, you then apply for all those loans simply to find out if you can get any of them approved, this is very likely to hurt your credit score, especially for mortgage loans that are of marginal in the first place and you just not qualify to apply for.
You should get a reliable and reputable loan officer at the time you are looking for one. Try to identify a top loan officer in the financial market who has successfully secured the lowest mortgage rates for his customers all the time and one who is going to treat you truly like an individual instead of a credit score rating, and get you the lowest rate for the loan you apply for.
On Loans: What Lenders and Borrowers Must Keep in Mind
Used carefully and responsibly, loans can be useful, but if abused or misused in any way then you should prepare yourself for a major financial headache. When we speak of loans, we refer to credit which is an amount of money asked from one party (the lender) to pay for or buy something by another (the borrower). This credit comes with a promise of repayment, plus interest or an additional fee within an agreed period. If these basic terms of lending are not met, loan officers are also faced with a major financial headache.
A Review on Loans
Several factors affect the loan process, and as loan officers or lenders, these factors must be well understood. One factor that has a bearing on the process of lending is the Cost of Credit; this is the additional cost that comes with the transaction in obtaining credit in the first place. Moreover, lenders must communicate to their borrowers that loan firms or any financial institutions charge certain fees depending on the type of loan given. For example, when a borrower uses a credit card, the borrower is expected to be charged for the balance they owe. Other lenders charge on an annual basis (annual fee) that is added to the balance. If the borrower opts for cash advances, this also comes with an additional fee. Car loans and mortgages often require additional down payments or closing costs.
These fees and the interest rates are what should affect a borrower’s decision to apply for a loan. Lenders, on the other hand, have the ultimate responsibility for communicating all of this to the borrower (by the Truth in Lending Act). Important financial information such as finance charges, annual percentage rates (interest rates), the amount financed, and the total amount of payments must all be disclosed to the borrower.
A Borrower’s Requirements and Concerns
One misconception that borrowers have about applying for loans is that banks provide more expensive loans and interest rates than alternative lenders. Although the cost of credit may be high, banks are the lenders that offer less expensive loans.
But still, borrowers cannot help but look for alternatives that suit their needs. One alternative for borrowers is the higher-purchase method, where they use the product whilst making repayments on a weekly or monthly basis.
The difference between this alternative and a conventional bank loan is that if a repayment is missed, then the merchandise or product can be taken back from the borrower and the borrower loses all the money they repaid.
Borrowers often do not know this and also when all repayments are added up, they are usually higher than a loan taken from a bank. Other borrowers opt instead for payday loans, and text loans.
For the Lenders
With all these factors taken into consideration, lenders are endowed with the responsibility of weighing these up before deciding if they are going to agree to make a loan. Thus it helps to keep the following in mind:
The Borrowers Ability to Repay
Assess if the borrower can repay the loan based on their current financial circumstances. Ask, how much they earn, how much money they already owe, what kind of work they do, and how long have they been their job.
The Borrowers Capital
What is their net worth, how much do they have in savings, do they have any investments, and can this be checked?
The Borrowers Financial Reputation
What do borrowers credit reports look like, what is their credit history, repayment history, account balances, their limits, and what do they have currently.
Bad Credit Home Loan Lenders
If you are on your way out searching for the bad credit home loan lenders or loan providers that best suit you for you to get the best and lowest interest rate of home loan for yourself. Then you are going to find some useful tips to assist you to choose for your ideal bad credit home loan lender and loan corporation.
Because applying for a home loan can be a very crucial decision, you should always get full awareness when comes to selecting a reputable and credible lender. By getting the best bad credit home loan lender, you are going to save yourself a lot of money.
3 Important Things You Need to Know When Getting a Bad Credit Loan Lender
Nowadays, there are too many mortgage loan lenders available in the market and all of them are trying to offer you the services that they have. It can be quite confusing for you when you are on your way looking for a home loan lender and you just have no idea about who you should go for. To help you out, you just need to remember these 3 things.
1. Which lender offers you the lowest interest rate?
By doing your research, you are going to come across some bad credit home loan lenders that seem very promising for you. If they are of reputable companies, you can just apply from these lenders and try to get as lower interest rates as you can from them. If you get approved, you will save yourself to spend less on the interest rate.
2. Can I Trust This Specific Lender?
When you applying and signing for a home loan agreement with bad credit, this can be a big commitment due to your poor credit score. Therefore, you must do your homework by figuring out the background of the loan company for its reliability and trustworthiness.
Besides, attempt to get in touch with their previous customers and clients to find out how satisfied the customers were with their loan services.
3. Is Their Customer Support Helpful To You?
If you have a lot of questions and problems and you seek the answers from their customer support, do they try their best to answer your doubts? Are they ready to assist you even after you have signed for the loan agreement?
Do the loan company taking care of their customer to offer loans that are reasonable and affordable for its customers? This can be very important questions you would wish to ensure before signing up any document with any mortgage loan lender.
So, why don’t you just try to make a toll free phone call to some of the mortgage loan lenders’ published customer support number and go through the QnA process to find out whether they are friendly and helpful enough to answer your questions?
If the loan customer supports are not patient to serve you and answer your questions, you may just leave that loan company alone and try to look for other bad credit home loan lenders.
Reasons Mortgage Lenders Turn You Down
The weak economy has been dragging on for more than three years. Banks have the largest inventory of unsold homes in the history of the United States. Mortgage lenders have responded to the financial crisis by making it more difficult to get a mortgage. It seems counter-intuitive, but here are 4 reasons mortgage lenders turn you down.
Years ago, banks reported loan and credit card payments to the credit bureau. No one else reported anything. Today, the utility companies, landlords, doctors, hospitals, your car mechanic, and anyone else whom you owe money reports your payment history to the credit bureau. This policy makes it more likely for Americans to have dinged credit; especially with millions of Americans unemployed, and millions more taking pay cuts in the hopes of staying employed.
When a creditor sees late payments on a credit report, he looks at the number of late payments as well as the severity of lateness. While 30-day lateness does lower your credit score, a charge-off will severely damage it. If there is a specific period of late payments, then prepare a written explanation for the reason, such as unemployment or an injury that prevented you from working for a few months.
Sometimes people with good credit are turned down for a mortgage. If the level of indebtedness is too high when compared to your income, then the mortgage lender will refuse to finance a mortgage, even if you have never missed a payment. This problem can be resolved by paying off debts to lower the debt to income ratio.
Marriage and Divorce
Divorce can ruin a good person’s credit, especially if all of the accounts were jointly held with the spouse. Mortgage lenders look at your new obligations, such as paying monthly child support, and combine that with the lower-income of a single household.
Single people pay close to the same living expenses as a married couple, so a larger portion of each paycheck goes toward the basics. If that portion is over the percentage amount allowed by mortgage lenders, they will reject the mortgage application.
A married couple that is separated can face the same problems, as now the couple’s income supports two households. Additionally, when someone with good credit marries a person with damaged credit, both suffer the lower rating since the income is now commingled. This can result in a person with good credit being denied a mortgage.
Although unemployment is a regrettable situation, mortgage lenders must see proof that you can repay their money. If you have lost your primary job, then work two or three part-time jobs to meet or exceed the income earned from the old job.
A drop in income is a black mark on the mortgage application. Moreover, work several months at the new job before applying for a mortgage. The best chance of getting approved is with good job history.
If you are still employed but had to take a pay cut or the boss cut hours, then get a second job to make up the lost income. Mortgage lenders require continuity of income or they will reject the application.
Health conditions are one of the 4 reasons mortgage lenders turn you down. If you suffer from a chronic health problem that incurs a cash outlay above what the average person pays for medical care each year, then the lender can turn you down. Additionally, if you have a medical condition that is expected to worsen and cause loss of income, then the underwriters might not approve the mortgage application.