Read these 30 How to Apply for a Mortgage Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Mortgages tips and hundreds of other topics.
Unlike applying for a credit card or auto loan, there is little benefit in applying to more than one lender for a mortgage loan. You might believe you are increasing your chances of getting the best available deal or giving yourself “insurance” that you will receive an approval. But, there are reasons that it is usually not in your best interest to do this.
Since the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) purchase the majority of home loans in the U.S., their standards are followed by most mortgage loan buyers. This means most lenders will require the same information from you. The differences relate to either the type of property being financed or the specific type of loan being used. The most common information all lenders require:
Depending on the type of financing and property involved, you will encounter some different time frames in getting approved and then closing your mortgage loan. Here are some estimates for your consideration. Remember these are estimates only.
Approval time period from formal submission date of an application:
Worried that bad credit will ruin your chances for a mortgage or raise your mortgage rate?
You don't want a bad credit mortgage loan, with higher costs and higher mortgage rates. If you had bad credit in the past, write a letter to your lender ande explain your situation. Were you behind on bills because of medical problems? Did you lose your job? In the letter, state what you have done to remedy your credit problems. Lenders must take these reasons into consideration when considering your mortgage application.
Different states have different lending procedures. Florida is a state that has great protections for home buyers and home owners which makes applying for a mortgage a very detailed process. If you want to know how to apply for a mortgage in Florida, here are a few steps to guide you through. Personally, I always suggest speaking with a certified Florida mortgage broker. They can always give you the best step by step instructions regarding how to apply for a mortgage. You can find these brokers all over the place in Florida because of the boom in real estate sales, development, and refinances.
There are almost as many mortgage brokers as restaurants, and each can truly be of help. Once you have spoken with a mortgage broker, if you still have questions about how to apply for a mortgage in Florida, you will want to hit the Web. Online you can find mortgage and lending resource websites that can give you state by state procedures and laws regarding mortgages. Take a good look at these websites if you want a full view of the procedures that go into a mortgage application. Soon you will find that you are comfortable moving forward with your application. When you reach that point, you will want to fill out a few different applications and get a variety of quotes. Perhaps the most important thing to remember in the state of Florida is to ‘homestead' your property immediately. In Florida, there is a ‘homestead tax exemption' based on the value of your property. This is up to a $25,000 deduction on your tax returns, so when you are asking about how to apply for a mortgage, also ask about how to go about homesteading.
For those that have never been homeowners or taken out a mortgage, the first time they fill out a mortgage application can be a daunting experience. Depending on the lender, some mortgage applications require several pages worth of responses to answers about the applicant. If you are in this process and are feeling the strain, don't let yourself get frustrated. All of the information on the mortgage application is necessary to secure your loan and here are a few ways to better understand that.
First, it is important to provide the lender with you employment information on your mortgage application. Loans are given out based on calculated risk factors by the banks. Your employment is an important factor to these lenders because it will give them an idea of what you can afford. The same goes for needing to report all of your expenses on a mortgage application. Only after the bank can see all of your other responsibilities can they properly evaluate what would be a good investment for them. Another important piece of the mortgage application is your credit history.
Unfortunately, this is the part where most people get frustrated. Too many people find that their credit is not where it should be when they actually get it pulled. Again, do not get frustrated. If you are working with a good mortgage broker, they can help you repair any bad credit along with taking your mortgage application. There are many parts of the mortgage application process that can cause people to become frustrated. Just remember that each piece is a necessary one toward getting you into the new home that you want so bad. Keep your eye on your new front door and the process will fly by.
There are only a few differences between a mortgage application for a home purchase and a refinance mortgage application. Knowing these few differences could save you a few headaches when you are going through the process. Here are a few of the differences that will influence your whole application process.
First, with a refinance mortgage application, there is only a single property in question. As opposed to a home purchase where you are usually paying off one home and moving to another, with a refinance, you are always working with your home. Therefore, you will want to gather up all of the information from when you closed your original mortgage on the house and you will get all of the info you will need for this part of the refinance mortgage application.
Also, with a refinance mortgage application, you have to choose what type of refinance you will be doing. Typically this is a choice between a ‘rate and term' refinance and a ‘cash-out' refinance. If you choose the rate and term there isn't not much work left for you to do. However, if you are doing a cash out refinance for home improvements or other reasons, some lenders will want information as to where the money will be going.
For example, if you are putting on a new roof, it would help your cash out refinance mortgage application if you can provide a quote for the roofing job. A refinance mortgage application is a fairly easy procedure if you are aware of the information you need. Take the information we have provided here and speak with a refinance specialist who can take you through the rest of the process. Good Luck!
Don't fall victim to a bad credit mortgage with higher interest rates because of your credit history. Sometimes a mortgage broker will impose higher costs on the same loans for different borrowers. The higher costs may be in the form of higher mortgage interest rates, fees, or points.
But you can even the playing field, and save yourself thousands of dollars. Just ask the lender if your mortgage rate is the lowest offered that day. Ask to see the list of mortgage interest rates that the lender or mortgage brokers were issued for the day. If your lender or mortgage broker does not share the list, or you see you are not being offered the lowest rates, try to negotiate or go somewhere else for your loan. If you choose to accept higher costs, ask the lender or mortgage broker why you did not receive better terms for your mortgage loan.
If your mortgage is denied, or you get a higher mortgage rate than you applied for, find out why. It is your right to know whether your mortgage application was accepted within 30 days of turning in the completed form.
When an application is rejected, the lender must tell you why in a written statement. A lender or mortgage broker can say that your income is too low, your credit history is bad, or you have not held a job long enough. All those reasons are valid. When loans are accepted but for higher-than-expected mortgage interest rates, the lender needs to tell you why.
There's no guarantee that when you apply for a mortgage, you will get one. Your lender or mortgage broker will look at your income, debts and credit history before making a decision. So, make sure your mortgage application gets serious consideration, and that you do not get a bad credit mortgage loan because of problems in the past paying your bills.
Of course, you have to provide to the lender all the financial information he or she requires to process your mortgage application. Lenders will first look at your employment. Have you held the same job for a while? If not, make sure you let the lender know your previous employment or why there was an interruption in your employment.
It's also a good idea to take a look at your credit report before applying for a mortgage. The information found on your credit report can affect your mortgage rate. Sometimes the report shows bad credit that has been fixed, or it contains erroneous information that you will need to correct. Avoid a bad credit mortgage loan. Contact the credit bureau to fix problems, and let your lender know about it.
A poor property appraisal can affect your mortgage loan application. In fact, this could be the reason your mortgage loan is denied. If this happens, get a copy of the property appraisal from the lender or mortgage broker. Make sure that the information in the appraisal is accurate.
An appraiser, by law, cannot consider racial composition of a neighborhood as a factor in his or her report. Likewise, a lender cannot raise mortgage interest rates because of the racial composition of a neighborhood when you are buying a home.
Mortgage rates vary greatly from lender to lender and broker to broker. If you really want to see the full gamut of what is available to you on the mortgage market, be sure to fill out a mortgage application online as well as with some local brokers. Filling out a single mortgage application online will usually get you at least 3 unique mortgage quotes. And this is a good start. However, you will only get the full picture when you see some quotes from lenders in your area.
Often, a mortgage application online cannot give you the benefits of what local lenders can offer. If you live in a city with much new growth, chances are that there are local lenders offering great incentives on their loans in specific areas. Get a local application filled out and compare it to what your mortgage application online yielded. Now you have a fuller picture from which to choose the right loan for you.
Many people prefer to research things such as mortgage applications before officially filling them out. If you are one of these people and want to see for yourself what goes into a mortgage application before submitting one, you can find full mortgage application forms online that can give you a head start.
To find a mortgage application form online, check with different banks and lending websites. There are almost always example mortgage application forms that you can download, print, and examine for yourself. This is a smart way to go since you can see what information you will need to gather before you fill out and submit an application. This type of research is how any savvy home buyer or investor will begin their mortgage process. See for yourself by downloading a mortgage application form from our sponsor. You can take advantage of these types of resources to make sure that you get the best mortgage loan possible when the time comes.
Today, people who are looking to purchase a home are finding that the mortgage application process has some new avenues that can be utilized. With the advance of computers and the Internet, more lenders everyday are letting borrowers know how to apply for a mortgage online. By learning how to apply for a mortgage online, homebuyers can shop around for great rates and programs without ever having to leave the comfort of their computer.
When learning how to apply for a mortgage online, the most important thing is preparation. There are still many questions that must be answered in a mortgage application. You will want to have the following information handy when you begin your application; Recent paystubs from your employer, your previous year's tax returns, statements from any bank accounts that you may have, and of course, all of your personal information such as social security and previous home information.
If you can arm yourself with all of this information before you begin, learning how to apply for a mortgage online is simple. Our sponsors are a great place to start the application process. There are any number of these websites that will provide you with a single application form which will translate into several different mortgage quotes. After you receive these quotes, just compare each and know that you are making the best choice.
So you feel you got a bad credit mortgage loan with a high mortgage rate. It's common for mortgage companies to assign a grade to your loan, no matter your credit history. The higher the grade the better the mortgage interest rates are likely to be.
Keep in mind that lenders have their own guidelines. If you think you got a bad credit grade and a higher mortgage rate, you may want to shop around. The grade is based on solid evidence in your own credit history. The lender looks at payment history, amount of debt payments, bankruptcies, and your credit score from a major credit reporting agency.
If you think you have been discriminated against through higher mortgage interest rates or the denial of your home loan, you can take action.
* Complain. Talk to the lender or mortgage broker. See if he or she will reconsider your application.
* Call your state Attorney General's office. Many states have their own anti-discrimination and consumer-protection laws. Find out if state laws were broken.
* Contact fair housing advocates. These agencies can help you file reports with state and federal agencies.
* You have the right to sue the lender. If you win, you can collect damages.
* Know which federal agencies enforce anti-discrimination laws. The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) protect homebuyers against discrimination applying for mortgages.
If you are like most current homeowners, you are loving the increases in home values over the past few years. Many of us have already chosen to take advantage of these increases by taking out second mortgages or home equity lines of credit against this increased value. If you are in this situation and want to fill out a mortgage application for a second mortgage, here are a few ways to get started.
First, we recommend the Internet for second mortgage applications. The benefit to online lenders of home equity lines of credit and second mortgages is the fact that most can offer a fast, no closing cost option and you can sometimes receive your funds in under a week's time. The key, of course, is in submitting a full and complete mortgage application.
Once they receive your mortgage application, you can get a few quotes, choose between them, and sign on the electronic dotted line to take on the loan. Typically, you will get a package in the mail that you will need to send to the lender, filled out, along with a hard copy of the second mortgage application. Once this is received, you can sit and wait until the send you the next package which should contain a big check.
So, your first attempt on a mortgage application was not accepted by the lender. Maybe you were able to get a loan, just not the one you were looking for. Don't worry, you are free to resubmit your mortgage application at any time. Usually, there are specific reasons for rejection and these things can be fixed on your next try. Ask for a full report as to why your mortgage application was rejected. Only then can you know what needs to be fixed.
If you have credit issues that need resolving, work with a credit repair agency before you resubmit a mortgage application. If you have income that you are having trouble proving, take the time to gather your necessary documentation before you resubmit. Resubmitting a mortgage application is simple once you have fixed the problems. Typically, because you are already in the system, these repairs can be evaluated quickly and you can get a quicker approval.
When you apply for a home mortgage, the lender or mortgage broker will review your income and expenses. But your income can be more than just the money you earn from a job. It can be public assistance money or alimony. To get the best mortgage interest rates, you want your lender to accept and consider all your income sources. It is in your best interest as a borrower to know the rules and to make sure the lender and mortgage broker follow them:
* Lenders must consider as income public assistance.
* Part-time work, Social Security, pensions and annuities also are considered income.
* The lender also must accept alimony and child support as income, if you choose to provide the information.
When you are filling out a mortgage application, there are so many boxes and questions that sometimes you just want the process to end, period. This type of frustration is typical, but don't let it bog you down. To help you out, here are 3 things that you should always remember to include in your mortgage application.
If you are looking to secure a mortgage for a new home and want to fill out a mortgage application online, here are three quick steps that can help you make sure the process goes swiftly and without any problems.
Investment property mortgage loans require a bit more complicated documentation, particularly if you are purchasing the real estate. This occurs because you have the same debt-to-income considerations and documentation requirements as with the purchase of an owner-occupied property PLUS the addition of a more complex appraisal, the need for lease agreements or tenant-at-will letters from your prospective tenants, and the often additional time it takes to complete these and other tasks (home inspection, pest inspection, etc.) because people need to gain access to the rental units, which often results in multiple visits because of the schedules of both the inspectors and the tenants.
The debt-to-income calculations are also a bit different than you might think. The logical approach is to add the net income you should receive each month to your income thereby improving your debt-to-income ratio immediately. However, this approach is seldom used as the secondary market, to which most mortgage loans are sold, does not like this calculation. Normally, the projection of your net monthly income (gross rents less vacancy [often 5%], mortgage loan payment, real estate taxes, insurance, and any other operating expenses (utilities, trash removal, snow plowing, etc.) for which you will be responsible) is included with your current debt profile (it should obviously reduce your monthly outflow for debts) to calculate your debt-to-income ratio. Confused? Here is a simple example:
Gross Monthly Income before purchase: $5,000
Monthly Debt BEFORE purchase: $1,700
Debt-to-income Ratio: 34%
Investment Property: Gross Rents $1,200
PITI & Expenses $ 900
Net Income $ 300
Method 1: Gross Monthly Income ($5000) plus Net Income ($300) $5,300
Monthly Debt AFTER purchase: $1,700
Debt-to-income Ratio: 32%
Method 2: Gross Monthly Income ($5000) plus Gross Income ($1,200) $6,500
Monthly Debt BEFORE purchase $1,700
(include new mortgage pmt. & expenses) $ 900
Monthly Debt AFTER purchase $2,600
Debt-to-income Ratio: 40%
You can see the difference as your debt-to-income ratio INCREASES to 40% instead of decreasing to 32%. This is a very conservative approach to the calculation but it is what the market wants. Take this into consideration if you are considering an investment property purchase and want to calculate your own debt-to-income ratio.
There are a number of mortgage products available for you if you have less than perfect credit. You just want to be sure you are making application for the “right” loan so you don't waste time and money to receive an answer you will not like. Do your homework and learn as much as possible about the mortgage loans available to a borrower with less than perfect credit. To do this, you must first learn exactly how much less than perfect your credit report and score really are. Occasionally making a late payment on a credit card account and/or an auto loan, then catching up rather quickly, is very different from consistently missing a mortgage payment or repeatedly being late with your rent. Once you learn the facts about your credit status, you can smartly search for a mortgage that fits your profile.
What you want to avoid is wasting your time and money applying for a mortgage loan with terms you could not achieve because of your derogatory credit. Knowing your true credit situation allows you to intelligently discuss your loan options with all legitimate mortgage sources, getting the right information to locate the best mortgage terms you can qualify for without paying more interest or closing costs than necessary. The good news: You can still buy the property you want or refinance your current mortgage to generate the cash you need.
There are a few basic costs that you will incur with almost every lender in the U.S, Canada, and Europe. The most common:
While most mortgage loans are of the full documentation variety, there are a number of products that are called a variety of different names, all of which fall into a category known as “limited doc” or “alternate doc” loans. Full documentation loans require that you submit verification for all income, cash, etc., as normally called for in most mortgage loans.
Stated income and assets is the most “liberal” of all the limited doc mortgage types. You merely “state” your regular monthly gross income and your available cash to complete the purchase or refinance of the property. You are not required to supply third party verification of the income level and available cash you state on your application. The lender agrees to accept your statement of your gross monthly income and liquid assets. However, this is not a giveaway program. If you are NOT self-employed or a commissioned employee, but are a salaried or hourly worker, you may not be allowed to use this product. Should you have poor credit and no excellent explanation for your status, you may also be ineligible for this type of mortgage.
In between these two ends of the documentation spectrum, are limited documentation programs, which may allow you to state your income but verify your assets by supplying one or two years' bank statements. Or, you might be required to prove your income but be allowed to just state your liquid assets, which allows you to borrow down payment or closing cost money without proving where you received the funds.
Stated income and asset programs are excellent choices to eliminate excess paperwork and can speed the process of approval and closing, however you will pay between one-quarter and three-quarters of a per cent more of interest for this privilege. If your credit score is below around 620, you will have fewer of these loan options open to you and you will probably have to pay one per cent or more above the full doc interest rate. But always examine all of your available options to locate the best choice for you.
While there are literally thousands of sources of home mortgages, the rule of thumb has not changed since the first home loan was granted. But there are some potential differences and things you should know:
The Internet has opened many new options for making a mortgage loan application. You should understand, however, that, like the rules of real estate transfers which are still based on 18th century English common law, the requirements for applying for and closing a mortgage loan are the same as always. With that in mind, here are some tips to using the Internet to apply for a mortgage loan.
A lender or mortgage broker must treat all mortgage loan applications equally, regardless of the applicant's race, age, gender or martial status. Federal law protects homebuyers from discrimination when they are applying for a mortgage loan. If you suspect discrimination, contact your state Attorney General's Office. Know the law and be informed as a consumer.
* Lenders cannot reject mortgage applications because of age, race, gender, marital status, national origin, or because the applicant is on public assistance.
* Be aware that you can be asked to list your race, national origin or sex on an application. The voluntary practice enables monitoring agenices to uphold anti-discrimination laws. Creditors also can ask about immigration status to determine whether homebuyers will be in the country long enough to pay off a mortgage loan.
* Lenders are prohibited from increasing mortgage interest rates or requiring larger down payments because of race, sex, or other factors.
* Lenders cannot inquire about a homebuyer's plans to have children.
* If the home buyer meets the standards for a mortgage loan, the lender cannot require a co-signer.
OK, so you know you have bad credit. But you don't want it to affect your mortgage rate and you don't want a bad credit mortgage loan. There are steps you can take to lower costs and improve the terms of your mortgage.
* Make sure all other financial information is filed with your loan application, including income sources and employment history.
* Have a stable income. Lenders look at how long you have held your job. Having assets helps.
* Pay bills on time. Late payments are a red flag, especially if you made late mortgage payments on a previous home.
* Settle old debts. Your lender will look at your history and pattern of paying bills. A lot of unpaid, old loans is a problem.
* Don't ignore debt. Paying late is better than paying nothing. Lenders look at your willingness to pay off your bills.
Government mortgages can be wonderful alternative choices to help you get the property and terms that work for you. There are two government-related programs that guarantee large portions of loans made by others. The Federal Housing Administration (FHA) and the Veterans' Administration (VA) provide financing guarantees to approved lenders to help many people, who may not qualify for conforming loans, to purchase property at reasonable terms.
Established in 1934 as part of President Roosevelt's New Deal program, the FHA was created to help people purchase homes. The original “non-conforming” or sub-prime mortgage product, the FHA program does NOT directly make loans; they guarantee them. To apply, you need the same information required for conforming mortgage programs (income pay stubs and W-2's, bank account information, last two years' tax returns, and all open loan information). If you are a military veteran, you should also have your Certificate of Eligibility and DD-214. If you don't need an FHA loan, you'll be better off applying for a conventional mortgage since you will pay a “guarantee” fee every month to cover the insurance FHA is providing. The cost of the FHA guarantee is 1.5% of your loan amount, charged at closing, and 0.5% annually on your outstanding loan balance. But if your credit is less than perfect and/or if you have limited cash for down payment and closing costs, an FHA mortgage loan is an excellent choice.
If you are a military veteran, the VA loan program might be the best choice for you. To apply, you will need all of the usual information (see above), including your Certificate of Eligibility. You can obtain this certificate through the VA or directly online through a number of sources. You will qualify whether you were a member of the regular military, the National Guard, or reserves. The good news: You can purchase real estate with no money down, no ongoing insurance fee (as with FHA), and your loan may be assumable, making it easier to sell your home in a period of rising interest rates. The only downside is that you will pay a “funding fee” at closing. The amount will vary depending on whether you are a veteran of the full time military or National Guard/reserves, the amount of your down payment, and whether you are using this benefit for the first time or have used it previously. If your credit is less than perfect and/or you are short of down payment and/or closing cost funds, this program will help you buy the home you want.