Home Mortgage Tips

Be Prepared for Your Mortgage Pre-approval Interview by Having Answers to These 4 Questions

Be Prepared for Your Mortgage Pre-approval Interview by Having Answers to These 4 QuestionsSo – you’ve completed an initial mortgage pre-qualification and now you’re ready to take the next step and meet with your lender or mortgage advisor for the pre-approval interview. Are you ready?

At this stage of the application process your lender will dig into your financial background to ensure that you’re fully capable of making your mortgage payments and that you don’t present too high a risk. Let’s take a quick look at a few questions you should know the answers to before you go in for a mortgage pre-approval.

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Do You Have a Specific Home in Mind?

If you’ve already picked out the perfect new home, be sure to bring along some of the details when you meet with your lender. At minimum you’ll want to know the price range that you’re expecting to buy in so that your mortgage advisor can try to find a mortgage that allows you to purchase the home and still meet your other financial goals.

What is Your Current Income from All Sources?

Your income (and that of your spouse, if you have one) will be a major factor in the size of your mortgage, your payment terms and the interest rate that you qualify for. If you have a significant income and it’s clear that you will have little trouble making the mortgage payments you’ll likely qualify for a shortened amortization period that includes a lower interest rate. Conversely, if you can only afford to make a bare minimum monthly payment you’ll be facing a longer mortgage term.

Do You Have Any “Black Marks” on Your Credit?

If you have any negative spots in your credit history you’ll want to ensure that you’re able to answer for them, because your lender will certainly ask about them. Be honest and confident, and remember that the lender wants your business as much as you want to receive a pre-approval for mortgage financing.

What Are Your Plans in the Next Five to Ten Years?

Finally don’t forget that interest rates will continue to fluctuate and that may have an impact on your mortgage in the near future. Be sure to share any major financial plans that you have with your mortgage advisor as they can keep you appraised of any refinancing opportunities that come about.

Buying a home is an exciting time – one that will be far less stressful if you are fully prepared for the many steps along the way.

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Understanding the Difference Between a Mortgage Pre-qualification and a Pre-approval

Understanding the Difference Between a Mortgage Pre-qualification and a Pre-approvalIf you’re in the market for a new home and you’ve been researching mortgages, you’ve likely come across the terms “pre-qualification” and “pre-approval”. While these terms are self-explanatory in some circumstances, they are quite different in regards to mortgage financing.

In today’s blog post we’ll explain the difference between a mortgage pre-qualification and a pre-approval.

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Pre-qualification: an Initial Look at Your Mortgage Options

The first – and easiest – step on the way to receiving mortgage financing to buy a home is known as pre-qualification. During this process you’ll meet with a mortgage advisor or lender who will assess your financial history including your current income and any debts that you might have. Using these numbers they’ll perform a quick calculation that suggests how much mortgage financing you might qualify for when you’re ready to buy a home.

Your mortgage professional will also answer any questions that you might have about the process, including what interest rates you may qualify for, how much you’ll need to invest in your down payment and more.

Pre-approval: a Conditional Mortgage Commitment

After you’ve been pre-qualified for your mortgage and you’re ready to start looking for a new home you’ll go through the pre-approval process. At this time your mortgage advisor or lender will take a much deeper look into your current financial situation, including pulling a credit report to assess how much risk they will have in lending you money. You’ll also complete a full mortgage application as this will allow your lender to get a conditional approval for a certain amount or range. Finally you’ll be informed about the interest rate and the terms of the mortgage once you find your new home and complete the purchase.

The Final Step: Finding the Perfect Home

Now that you’ve been pre-approved and have received a conditional commitment from your lender, you’re ready to find that perfect new home. On top of having a better idea of your price range and what you can afford, you’ll find that sellers are far more receptive to your offers as having a pre-approval signals that you’re a serious buyer who is ready to make your move.

When you’re ready to buy your new house or condo, your me to get a recommendation for lending, at 985-626-1313. Contact them to learn more about pre-qualification, pre-approval and your financing options. Enjoy your new home!

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How to Use a Mortgage Calculator to Determine Your Monthly Payments, Interest and More

Are you thinking about using a mortgage to buy a new home? Buying your own piece of local real estate is a major financial investment and one that can require some pretty complex math to fully understand.

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In this blog post we’ll discuss mortgage calculators and how to use one of these tools to determine your monthly mortgage payments, interest charges, amortization periods and more.

Determining Your Principal and Down Payment Amounts

To get started with a mortgage calculator you’ll need to know how the price of the home and how much you intend to contribute as a down payment. Generally speaking you’ll want to place a down payment of at least 20 percent in order to avoid having to pay for private mortgage insurance and to give you access to better interest rates.

Choosing Your Interest Rate and Amortization Period

Now that you have an idea of the amount of mortgage financing you’ll need, the next step is to choose your interest rate and amortization period. Different lenders will offer different interest rates for every one of their mortgage products, so again you’ll want to play around with these numbers and run the calculation to see which combination of mortgage financing, interest rate and amortization period gives you a monthly payment that suits your budget.

Using a Mortgage Calculator for Refinancing

If you’re thinking about refinancing your current mortgage you can also use a mortgage calculator to help make the math a bit easier. Simply use your outstanding mortgage balance as the principal amount and then choose an amortization schedule that fits your financial goals. Be sure to keep an eye on your interest payments, as you may find that by refinancing to a longer amortization period your monthly payments go down but your total interest paid is quite a bit higher.

Don’t Forget the Closing Costs

Finally, don’t forget that there are numerous “closing costs” – fees, taxes and more – which you’ll need to factor in to your overall calculation. Closing costs will include everything from home appraisal fees to government filing fees and property taxes, and will vary depending on the home and the city or community you’re buying in.

While online mortgage calculators can handle the tricky math to determine monthly payments and interest costs you may still find that you have questions about your mortgage or some aspect of the process. For more information, contact your local mortgage professional and they’ll be happy to share their advice and expertise.

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How to Buy a Home and Start out with a Low Monthly Mortgage Payment

Buying a Home? 4 Steps You Can Take to Ensure You Start out with a Low Monthly Mortgage PaymentAre you thinking about buying a new house or condo? If so, you’ve likely given some thought to your mortgage and as to how you can pay as little as possible in order to own your new home.

Below we’ll share four easy steps that you can take to ensure you start out with an affordable monthly mortgage payment.

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Make A Large Down Payment On Your Home

The easiest way to reduce your monthly payment is to invest as much as possible in your down payment. The less you have to borrow, the less you’ll be required to pay back.

If you can put a sizeable amount down on your home you’ll find that your monthly payments are going to be very manageable. You’ll also save a lot of money in interest.

Maintain A High Credit Score

When a lender assesses your financial history they’ll take an in-depth look at your credit score in order to determine how much risk you present to them. If you’ve kept a clean credit rating and have a high score, it’s likely that you will qualify for a lower interest rate than someone with a lower credit score – even if you both have the same monthly income.

Buy A Smaller, More Efficient Home

When you’ve made your short list of homes and you’re scheduling your viewings, ask yourself – do you need a home this big, or this expensive? If you can do with a smaller, more efficient home you can reduce the amount of mortgage financing that you require and this will in turn reduce the amount that you need to pay each month.

Consider A Longer Mortgage Term

Finally, if you need to reduce your monthly payment at any cost you can stretch out your mortgage repayment period by a few years. Note that while this can reduce your payment amount it will actually increase the total amount that you end up paying back as you’ll pay more in interest.

While the above are general tips for reducing your mortgage payment, it’s likely that there are other strategies that are unique to your financial situation. Contact your local mortgage professional at your convenience and they’ll be able to share insights that are relevant to your income, your credit and the price range you’re looking to buy into.

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Shopping Around: How to Compare Mortgages from Different Lenders or Underwriters

Shopping Around: How to Compare Mortgages from Different Lenders or UnderwritersBuying a home is a major financial transaction, especially if you’re going to need mortgage financing to help cover the purchase cost.

The only way to know if you’re getting the best deal on a mortgage is to shop around, but with so many different lenders vying for your business it can be very tough to choose which mortgage is the best fit for your own situation.

In this post we’ll share how you can compare mortgages from different lenders or underwriters so that you can get the best possible deal on your mortgage loan.

Start By Comparing Interest Rates

The most important factor in your mortgage is the interest rate that you’ll be required to pay so this should be your starting point.

While most lenders will keep their rates competitive with one another, you may find that there are discounts available based on your credit or financial history. You might also find that some lenders are willing to adjust the rate based on how long of a mortgage term you’ll need, and how much you’re investing in your down payment.

Get An Estimate Of Your Total Closing Costs

While the number that you’re likely focused on is the total monthly payment that you’ll be making for the next few years, you’ll also want to find out how much in fees and closing costs you will have to pay in order to take out the mortgage.

Every lender charges different fees and the amounts can vary wildly, so be sure to get an estimate on these costs to find out how they’ll affect your home purchase.

Watch Out For Early Payment Penalties

Finally, you’ll want to keep an eye out for early repayment penalties as these can cause you a headache later on if you decide you want to pay your mortgage off a bit faster. The ideal mortgage is one that allows you to repay the principal amount at any time without facing a penalty, but depending on the other terms that you require you might need to shop around a bit before you find a mortgage like this.

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Turned Down for a Mortgage? What to Do

Turned Down for a Mortgage? What to Do if You are Declined - and How to Get Second OpinionIf you have been declined for a mortgage, you may think that buying that new home is out of reach. However, there are ways to turn a rejection into an approval and to find a more accessible loan. Here are just a few steps you can take to learn about your loan options and get the mortgage that works for you.

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Find Out Why The Mortgage Application Was Denied

The first step to getting a second opinion is to find out why your mortgage application was denied. Banks commonly deny mortgages for reasons like a low credit score, a high debt-to-income ratio, or concerns about the applicant’s past and present employment status.

To qualify for a mortgage, most lenders want to see someone with a credit score of 640, a debt-to-income ratio of less than 43 percent after the mortgage is included and at least 30 days in your current position if using wage income to qualify for the loan.

Not All Lenders View An Application The Same Way

A good reason why it is worthwhile to ask for a second opinion about your ability to get a loan is because no two lenders will view an application the same way. For one lender, a credit score of 650 is insufficient for getting a loan – but another lender might be more than happy to offer you a mortgage with a score of 650. To get a second opinion, you may wish to talk to a mortgage broker who will be able to scan a variety of loan programs to find one that works for you.

There Are Ways To Find Down Payment And Closing Cost Assistance

Those who have a low credit score or other questionable metrics may be able to qualify for a loan by offering a larger down payment. While a first-time buyer may not have the cash on hand to make a larger payment, there may be programs that provide grants or low-interest loans that can be used as part of your down payment or to help pay closing costs. With this extra money, it may be possible to overcome lender objections and obtain a mortgage.

If your mortgage application has been rejected, it doesn’t mean that you can’t get a mortgage from another lender. If you’re ready to buy a house but just need to clear the mortgage approval hurdle, there are ways to get a leg up.

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5 Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every Time

Five Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every TimeBudget for your Mortgage Tips and Tricks in St Tammany!

Homeowners who are struggling to make their monthly mortgage payments can make it easier on themselves by cutting costs in other areas. Learning how to budget effectively will likely enable homeowners to pay their mortgage payments on-time, every time. Here are five of the best budget tips:

Conserve Energy

It is advisable to be mindful of energy use in order to keep utility bills down to a minimum. Lights, televisions and other devices requiring electrical power are best to leave off in unoccupied rooms. It is also a good idea to make sure that windows and doors are properly sealed so that energy is not wasted.

Stay Committed to Couponing

All too often, coupons that arrive in newspapers or through emails are quickly discarded. Collecting coupons from various sources can give homeowners the chance to save big on groceries, entertainment and other everyday purchases. Some of the savviest consumers have been known to spend practically nothing on their purchases by simply staying committed to the art of couponing.

Watch Credit Card Usage

Having a credit card often creates a false sense of financial security. Many card holders are tempted to charge their credit cards up to their limits only to be burdened with high interest rates and inflated minimum payments. Credit cards are best to use only in times of emergencies.

Consider Alternative Transportation Methods

Fuel costs, auto repairs and other expenses associated with driving a vehicle on a frequent basis can make it much harder for homeowners to stay on top of their mortgage payments. People who have access to adequate public transportation may be able to significantly reduce their commute costs. Car sharing services give people the opportunity to use a car on an as-needed basis and often prove to be a smarter alternative to owning a vehicle.

Keep Expense Records

It can also be easier to set money aside for mortgage payments if expenses are carefully monitored with a detailed eye. It is best to closely scrutinize receipts, bank statements and other financial documents for any discrepancies. Keeping track of expenses on a spreadsheet so that all financial information is clearly displayed may be another practical idea.

Smart budgeting practices can help homeowners save the extra money they need to pay their monthly mortgage payments before each due date passes.

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