Educating yourself is the key to getting approved for your mortgage loan. Many people don’t know the first thing to do about how to get home mortgages. Educating yourself is vital because getting a home loan differs a lot from getting a car loan.
Buying a house is a complicated thing and being unprepared increases the stress. You don’t have to put yourself in a stressful situation. Learn and educate yourself on the best ways to have your home mortgage approved.
Here Are Some Useful Tips for Getting Home Mortgages
1. Make a small down payment or even no down payment at all. Many people have this idea that to buy a home and be approved for your mortgage you must pay a considerable sum of down payment. The fact is some loan programs allow borrowers to apply even without any downpayment. There are programs which allow down payments at 3-3.5%. The Federal Housing Administration-insured mortgages peg their downpayment at the mentioned rates.
2. Have home mortgages even with low credit score. Federal Housing Administration-insured loans are widely available to borrowers even with little or bad credit. If you buy a housing FHA the credit score required is 686 while the typical home buyer must have a credit score of 753.
If you pay a down payment with FHA loan, they require a lower credit score to approve home financing.
3. Have some savings as a reserve. Most lenders advise that you don’t have to give all money to down payment and closing costs. The importance of having money is to reserve them for any emergency expenses. This prevents you from missing any monthly amortization.
4. Save by refinancing into a 15-year-old loan. The advantage with refinancing to 15-year-old loans is your mortgage will be pegged to lower interest rates. The total interest paid over the period of paying the loan is less.
5. Borrow only what you can afford. Plan to buy a house which you can afford to buy. Don’t buy a big house with the thought that your pay increases in the future. Well, it may be fine to be positive, but it pays to be conservative. Don’t worry you’ll be able to move to a bigger home in the future.
6. Ask for a no closing cost mortgage. Typically, no closing cost mortgages are good for people who plan to dispose their homes within five years. If you think you are staying in your house for more than five to six years, then it’s okay to pay closing costs.
7. Try to refinance into a Veterans Affairs guaranteed loan. The majority of cases you can refinance up to 100 percent of the current value of the home. Therefore you can do cash out refinance using the Veterans Affairs loan. Funding fees may be added to the loan balance.
All these things may be foreign to you, but it requires due diligence and research especially for beginners. The best advice is for you to consult a mortgage lender or ask your personal financial adviser.