Tips On Getting A Mortgage Loan

Here are some tips on getting a mortgage when buying your first home. There are several things that you need to know before applying for your mortgage. You should always shop around and get several quotes when looking for a house or property to purchase. You will be surprised at just how much money you can save.

File your federal income taxes right away Every self-employed individual should file their income taxes before the end of the year. But if you're purchasing a house and obtaining a mortgage loan, you must prove your income with a pre-licensure class. To do this, the best way is via your federal income tax return.

Have your financial statements ready before you speak to a lender One thing a lot of borrowers forget to ask their lenders is whether they require a letter from a bank accountant or a CPA. Your lender needs both of these forms. It shows that you understand how risky your investments are and your financial statements are in order so that lenders are more willing to approve loans. In addition, if you were self-employed during the last two years, your lenders might require you to pay a COBRA charge that can make your mortgage loan more expensive if you're unable to continue making payments. If you have a mortgage broker, he can explain to you how important this is to your future ability to rent an apartment or purchase a house.

Own either a conventional or a preferred lender When it comes to conventional mortgages, the conventional type has fixed interest rates and the principal is usually set at 100 percent of the purchase price. A preferred lender has flexibility, which means the amount of interest you pay may be determined by the capital structure of your deal. For example, some lenders might be willing to offer you a variable rate with a ten percent annual return. With a conventional loan, the property usually belongs to the lender, so the buyer must have a direct relationship with the lender in order to access the loan agreement.

Own tax returns Owning tax returns isn't something many homeowners would consider to be a good tip on getting a mortgage. Most people wouldn't even dream of owning tax returns. Yet, when you consider that many people file their tax returns as themselves every year, more homeowners are considering this option than ever before. The reason for the surge in interest is because of the uncertain economic landscape, especially with tax refunds being sent out in April. Owning tax returns also gives prospective borrowers a security blanket should their income fluctuate because of job loss or other personal issues. It can also keep you out of hot water with the IRS if tax problems arise at a later date.

Work with a mortgage broker Even though most lenders do not actively look at a borrower's credit, they are still able to use your credit score as part of their overall loan decision. This makes working with a licensed mortgage broker a smart move for potential borrowers. When working with a broker, the brokers work on your behalf to secure the best interest rates and terms. If the interest rates become too high, many homeowners do not have the funds available in their budget to make the mortgage payment at the terms agreed upon by both the lender and the broker.

Ask your relatives and friends What may seem to be a tip on getting a loan is telling a trusted friend or relative about your intentions. However, the fact is, mortgage brokers generally earn a commission from the mortgage companies, so it's wise to keep any information about your finances to yourself. Your friends and family may have experience with loans in the past that can help give you some tips on getting a mortgage loan. However, the sources for obtaining this type of personal finance advice should come from trusted, non-connected sources.

Take advantage of a free mortgage broker If a lender does not require a mortgage broker license, they may offer their customers a complimentary mortgage broker exam. Taking the exam is an excellent way for potential borrowers to learn all they can about the industry. Once licensed, borrowers will be able to search for the best deal on a loan. Borrowers can also get valuable advice on negotiating the best interest rates and terms. In addition, lenders may offer other helpful resources to help borrowers get started, such as loan calculators and free loan quotes.