Tips For Mortgage Borrowers To Navigate The Mortgage Process in 2015
As the mortgage rates surprisingly stayed low in 2014 so nobody knows that how they will work out in the New Year. Those borrowers who want to refinance or buy a home they have the best chance to get the lowest rate by knowing more about the mortgage game. Here are top ten important tips that can help you to navigate the mortgage process in 2015.
- Pay less mortgage insurance: – Mostly homebuyers do not have enough cash on hand to make a 20 percent down payment, which means that they generally are required to pay for mortgage insurance as part of their monthly mortgage payment. This insurance protects lenders when a borrower defaults on the loan. In the late 2014 Fannie Mae and Freddie Mac required down payments of at least ten percent. But in 2015 those borrowers who are qualified will be able to get Fannie- and Freddie-backed mortgages with down payments as little as 3 percent. Mortgage insurance bonuses vary according to credit score and size of down payment, but private mortgage insurance bonuses are generally more affordable than FHA premiums.
- Get a thorough preapproval: – There are not only sellers who sometimes prefer those buyers Not only do sellers often prefer buyers who come preapproved by a lender, making their offers more attractive, but a preapproved mortgage also can help you avoid any hazards down the line. With a real preapproval, a mortgage broker or bank loan officer will pull your credit report and submit supporting documentation to their automated underwriting system. It also puts you ahead of the process when you finally go into contract and could help you close faster.
- Maintain your credit profile: – Do not change your credit obligations in the leading months of home purchase because it could hurt your credit score in a way that would raise the rate and fees related to your loan and keep you from qualifying altogether. Do not close or open any credit cards. Keep balances on your credit cards within normal range so it would not disorder with your debt-to-income ratio. And do not buy a new ride.
- Get organized: – Gather and keep every piece of financial paper in the two months that leading up to buying a house. That means pay receipts, bank statements for savings, checking and investment accounts, W-2s, tax returns for the previous two years, cancelled rent checks and any mortgage or property tax statements for other property you own.
- Do not move money around: – In the leadings months of the home purchase try to keep your hands off your finances. That includes moving money from a savings account into a certificate of deposit, or CD. It also means no cashing in investments from stocks, retirement accounts or CDs. Otherwise; you will create a huge headache for yourself as you try to show the bank the paper trail of where that money came from.
- Prepare to write letters: – In the leading days of home purchase lenders inspect every corner of your financial life, and if something looks funny, even just a little bit, they will want to know why. That means you will have to write letters explaining the abnormality. For example, they may want a letter explaining why a credit card issuer pulled your credit three months ago when you applied for a store credit card.
- Get your gift early:- If a family member is gifting some or all of your down payments then make sure it is deposited in your bank account more than two months before you apply for a mortgage. That way, the bank would not need to source the large deposit. Otherwise, the gift-giver will need to sign a gift letter, stating that the money is indeed a gift and not a loan. The giver also will have to provide the bank with a copy of the check before closing and verification that they have the funds to give by supplying either bank statements or a letter from the giver’s bank.
- Self-employed: – Self-employed borrowers have a higher hurdle to overcome after stricter mortgage requirements went into effect in 2014. To get rid, self-employed borrowers should plan to take fewer deductions the years before buying a house to boost their overall income. If they cannot they may consider a co-signer on the loan whose income is documented by W-2 statements.
- Know your refinance magic number: – If you are thinking about refinancing your home loan then figure out that what mortgage rate you need. It is not an easy number to calculate because you need to look at a host of factors regarding your loan, including what you want to get out of the refinance. Your broker will help you find the rate that benefits you most.
- Get creative with a reverse mortgage:- A reverse mortgage lender contributes up to 52 percent of the sales price of a new home. The house is titled in the borrower’s name, but the lender shows a security interest in it. There are no monthly payments, and when the home is sold or no longer the borrower’s primary residence, the reverse mortgage must be repaid.
