|
Advise “U” Mortgage, A Home Mortgage Guide.
Whether you're a first-time home buyer, home buying seasoned
veteran, or just looking to refinance your existing
mortgage, we can help you make sense of the loan
process, without having to understand all that confusing
mortgage jargon that lenders and brokers use.
1. What do lenders/brokers examine in order to approve your Loan?
Brokers and Lenders take many different factors into account when
pre-qualifying or pre-approving an individual for a
mortgage. Let’s face it; hundreds of thousands of dollars can be lent out on a single loan.
If it were your money being lent, wouldn’t you
want a few questions answered before you handed over
that money? Have the individual(s) been responsible with their money in
the past? What is the money being used for? And, most importantly, can they afford to pay the
money back? These are the same types of questions loan underwriters
ask when a prospective buyer applies for a loan.
Underwriters approve or deny a mortgage loan application
based on an evaluation of the following:
The Appraisal – An appraisal is done by an independent appraiser, and provides a
market value of the home you want to buy. This market value is based on similar homes that
have sold in the surround area. Generally the appraiser will only look at the
homes that have sold in the last 6 months in order to
get a fair market value. An appraiser also inspects the property to
evaluate its general condition and to ensure that there
are no repairs necessary in order to bring the property
to its full value. The loan amount is based on either the sales
price or the appraised value, whichever is lower.
Your income and assets -
Your current earnings, along with available funds (like bank accounts,
investments or gift funds) help determine your ability to repay a loan.
Your down payment - Your down payment is the money that you will put toward the purchase of
your home. The more money you put down, the less you
need to finance and the lower your monthly mortgage
payment will be. If you put down 20% or more you can get a loan that does
not carry private mortgage insurance. Lately, many lenders offer combo loans, which are
two mortgages instead of one that allows an individual to obtain the financing that they desire without paying
private mortgage insurance.
Your credit history - A large part of the Lenders decision-making process is
made in part on how you've handled your credit payments in the past. Lenders pull a credit report from all three
major credit bureaus – Equifax, Experian and Transunion. This merged report shows the types of credit
you've had and whether or not you've made your payments on time.
Advise "U" strongly recommends that you request a copy of your credit report before you apply for a mortgage. That
way, you can detect potential credit concerns on your
report in advance, such as incorrect information, and
you will have the
time for the credit-reporting agency to correct it. We recommend either contacting the credit
bureau’s directly or we recommend going to http://www.myfico.com/ and obtaining
a copy from there.
NEXT: On To Pre-qualification/Pre-approval
| 
Home
