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How to Get A Home Mortgage

Getting a great loan and then setting yourself up for an easy cruise through the process of buying a home does not happen accidentally. You will have to take small steps to begin, as you do for most big decisions. To get you started properly, here are six tips to implement when getting a mortgage. Budget Wisely Budgeting is what actually tells you what kind of mortgage and home you can afford. Compare prices of the homes you saw when searching around so you can get a ballpark figure. After that, to create your budget, figure out the following: The amount of money you’ve saved for a down payment The estimated cost of living expenses Monthly debts and most importantly, your income. It is important for your mortgage payment not to go beyond 43% of what you earn monthly to avoid getting cash strapped. Decide on a Mortgage Type The type of loan you are eligible for will be determined by the type of home you want to purchase and the level of assistance you need. Find out, as an example, which of the following qualifications you meet. If you’re looking for very expensive homes, you may need to get a jumbo loan. For a first time homebuyer that has good credit, you may think of the Federal Housing Authority’s first-time homebuyer loan. The loan only requires a down payment of 3.5% and the interest rates it normally comes with are good. For a military veteran, what you should be considering will be the Department of Veterans Affairs (VA) loan. Mortgage Broker or Lender? To find a loan, you can either directly deal with the lender or get a mortgage broker to help. Going the solo route will require you to do all the legwork yourself while shopping for a loan. This will include comparing interest rates and other loan terms form different lenders that you have approached personally. Enlisting a mortgage broker means that all the legwork will be done for you while working with you to determine the type of loan best suited to meet your needs. Though they will typically charge you about 1% to 2% percent of the loan amount. If the process of research and tracking down of information seems too confusing and daunting for you, it will be a great idea to hire a good mortgage broker, otherwise, go solo. Check Your Credit At this point you check your credit report for any blemishes. If there is anything that does not look right, you should ask for it to be removed. The law permits that you acquire a free credit report per year from each credit report company so you can go to annualcreditreport.com to obtain yours. Get Your Paperwork Together Ensure you have all you need to back up the numbers as your finances will be under the microscope. If anyone gifted you some money recently or have opened a bank account in the previous six months, you should get ready to give the lender the reason. Get the following documents ready: A proof of all your assets Two years of income statements Two years of tax returns Two forms of identification issued by the government Although this isn’t an exhaustive list in the process of securing a mortgage for your dream home, getting your paperwork right from the onset will insure you get a good mortgage at a good price..
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