Apply For A Mortgage - Information and Advice

"How to apply for a mortgage the right way and get approved fast."

What To Avoid When You Apply For A Mortgage.
by Craig Romero

By learning and understanding the following eight mistakes, you’ll not only save thousands of dollars but most importantly you’ll eliminate the chances of not qualifying for a mortgage.


1. Being Uneducated About The Mortgage Process

Since buying a home will most likely be the largest single purchase you will ever make, it’s important you understand the actual process of a mortgage to insure you capitalize on your investment.

Utilize my reports to educate yourself…it will save you from running in to major problems and allow you to turn your home into a profitable investment. Also, seek out a lender you feel comfortable will be patient, professional and honest.

2. Dealing With A Second-Rate Mortgage Company

As a mortgage Analyst, I can’t stress how important it is to research your mortgage company before dealing with them. Don’t be afraid to ask any questions you feel necessary.

Be sure and ask for references. Make sure they have satisfied customers. Be sure to ask what percentage of their mortgage applications are denied. If more than 10% of their loans are never funded, look elsewhere.

Ask what their average turn around time for processing a loan is. Most modern mortgage companies should be able to approve your loan within hours or even minutes.

They should be able to fund your loan within 7-10 business days. In this day and age, there’s no reason to put up with a second-rate mortgage company.

3. Dealing With A Lender Who Funds Their Loans Through Only One Investor

In the mortgage world loans are called products. As you probably know, there are many different types of loans to suit different types of situations. Some people require a 30-year mortgage while some would rather have a 15-year term.

These are just two of the most common loan types. There are so many different types of loans (products) it would be impossible to list them all. To see a comprehensive list of loans and their description, please refer to the E-Loan website.

Since not all lenders have a wide range of products, make sure to ask for a list of loans or products a lender has and have him or her sit down and explain the pros and cons of each one that would be of interest to you.

Choose a lender with the widest selection of products. That will insure you get the best loan possible.

4. Being Misinformed about Your Down Payment

Since the amount of money you place on a down payment will directly affect your monthly payment, your mortgage term and your interest rate, it’s very important to take the time and understand your options.

It used to be typical that a person places 10% down, however now days there are many different programs available for different situations.

There are now programs that allow you to put below 10% down or even 0 down. Just remember that the less you put down, the longer your mortgage term will be in addition to a higher monthly payment and or a higher interest rate.

However, you want to make sure you don’t put yourself in a bind trying to make a down payment that is larger than you can afford.

5. Making Large Credit Purchases Prior to Applying For Your Mortgage

Since the amount of debt you have is calculated in determining how much of a home you qualify for, be sure not to make any large credit purchases before applying for a mortgage.

6. Over Shopping Your Loan

Over Shopping is when you contact multiply mortgage companies for a quote. In order for a mortgage company to give you an accurate quote, it’s necessary for them to pull your credit report.

If your credit report is pulled more than 2-3 times in a six-month period, you risk decreasing your credit score. Which in turn could keep you from obtaining the best possible rate and loan term.

This is why I recommend researching mortgage companies before hand. Finding a mortgage company with a large selection of products will decrease the need to over shop.

7. Keeping Personal Information From Your Mortgage Broker

This is often one of the most frequent problems mortgage brokers run into when dealing with a client. Your entire financial history within 3 years prior to applying for a mortgage may be used as a reference to calculate how much of a mortgage you can afford.

It’s crucial you are honest and up front about all this information with your broker, even if you have had some problems dealing with financial difficulties in the past. You may find it difficult to discuss issues such as this, however it’s best to present and explain these matters in the beginning.

Trying to hide past financial difficulties will only slow the loan process. Your mortgage broker is used to dealing with these issues, it’s important to work together to overcome negative financial history.

8. Not Using Common Sense

Most people will already know it’s important all credit card balances should have very low balances or none at all before applying for a mortgage. It won’t allow you to obtain the very best rate and terms if you have racked up balances on your credit cards.

Also it’s important you have a good history of paying your bill on time (especially within the last year). I may be a bit redundant in mentioning these things…however, these issues are super important factors in obtaining the best loan possible.

Note: I don’t want the above considerations to scare you from going out and applying for a mortgage. Just arm yourself with the best knowledge available and understand the factors above are important to getting the best possible interest rate, monthly payment, and term.

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Written by Craig Romero

Discover how to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less without making biweekly mortgage payments. Visit: www.wisemortgageinfo.com

Craig Romero is an author and mortgage analyst dedicated to helping homeowners maximize the investment in their homes.
 

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