Tuesday, November 18, 2014

Home Mortgage Loans: What to Do When Rules Tighten


The speedy growth in the use of non-traditional home mortgage loans, particularly among less creditworthy borrowers in the population has alerted regulators who now want to tighten up requirements for those who want to avail of the loans. This generally implies that lenders are obliged to squeeze underwriting requirements including less dependence upon credit scores and more reliance on documented proof of one’s income and repayment capacity. The Feds say that models of creditworthiness that incorporate less documentation have not been tried in a stressed environment, like the general housing market at present, characterized by falling home sales and prices and rising mortgage rates. If you haven't already gotten the trouble-free mortgage money of your preference you could see fewer loan choices, a more stringently examined application and escalating pressure on interest rates due to the combined forces exerted by current market conditions and new rules. Here are some ways to improve the odds of getting the loan of preference.

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First, be aware that information resources regarding home mortgage loans are vast. These include, on top of all, the Internet. Other information resources that include mortgage books, topical newspaper articles, consumer seminars and workshops, real estate agents, mortgage brokers and lenders, financial planners, are all available to assist on giving the insight regarding what is likely to be your greatest financial transaction ever.

Second, have a clear view of your credit report. You need to know where you stand before you apply for a home mortgage loan. You want to know if there are errors, derogatory remarks or other information that could affect your application. You may also need some time to make things as nearly perfect as possible.

Third, know and accept your limits. As it is imminent from the Feds' proposal to curb risky home mortgage loans, lenders have been more apposite in qualifying you for as much as they are willing to lend, with terms that seem acceptable today, but could become intolerable in the future. Stretch within your limits to pay for the most home you can purchase, if you want to shun the costs of moving up or adding on later, but do not stretch beyond the limits of what you can truly afford. Determine how your mortgage payment will tally with your current budget and your future financial obligations. Reckon all the costs of home ownership from rising rates on adjustable rate mortgages to insurance and taxes as well as the cost that offset financial benefits of owning a home such as equity growth and tax breaks.

Fourth, comparison shopping is a reliable friend. You have to shop for mortgage lenders, brokers and online mortgage outlets in order to compare and assess what is best. To the extent that it is possible, compare all broker fees, major loan costs, rates, points, and other costs to come up the best assessment.

Fifth, be prepared. When the moment comes for completing your home mortgage loan [http://floridamortgagebroker.us] application, have all pertinent documents ready. You may have to prove employment, job tenure, employment stability, income, assets and liabilities. Keep handy your pay stubs, tax returns, rental agreements, divorce decrees, proof of insurance and any other documentation that might support your application papers.

Sixth, never hesitate to solicit as much help as you need. Whenever possible, pull along all those documents to the broker’s or lender's office and let the broker or loan officer help you out with completing the application correctly the first time. You can also seek assistance from a housing agency, independent mortgage counselor, financial planner, social service agency or other person you might consider an expert.

Seventh, make sure to settle on one loan if you have done your own research. Complete one application and see it through. Do not hit two birds with one stone at the same time. Online applications make it easy to fire off several quick applications, but each one could trigger a credit check. That could send the wrong signal to a lender who could reject an application that yields a credit report with numerous credit checks in a short period.

Lastly, you have to stay put and have patience. Do not complete filling up an an online mortgage application, if you do not have Internet access at home or you will defeat the purpose of the automated online mortgage process. Do not plan a vacation, road trip or getaway during the application process. If there are questions about your application, you'll need to be available to address them quickly.


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