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Basic Information You Need to Know about Getting Home Mortgage Loan
Interested in getting a home mortgage loan soon? Here is some basic information you need to now about home mortgages. Arm yourself with these pieces of information before moving further.
Everyone surely believes that courage, hard work and determination are the keys to financial prosperity. One of the most predominant symbols of stability is owning a house. More often than not, owning a house today means getting a home mortgage loan for finance the purchase. A home mortgage basically entails that you pay a certain amount of monthly payment over an extended period of time (also called term, usually lasting 10 to over 30 years).
When you get yourself a home mortgage loan, it usually covers four inclusions, namely the principal amount, the interest you owe on the balance, homeowner’s insurance as well as real estate taxes. There are two different types of home mortgages, the fixed rate (where your monthly payment remains the same) and the adjustable rate (where monthly dues fluctuate), Your home mortgage loan can also include conventional, non-conventional, interest-only, reverse mortgages and home equity loans, among many others.
How to apply for a home mortgage loan
There are only three steps you need to take to apply for a mortgage. First, you simply fill out an application form and schedule a meeting with your lender. You must present all supporting evidence about your identity, financial status and credit situation. You usually need to pay around $100 to $300 for this. The next step to do is to wait for your lender to obtain your credit report for you and to verify your application and financial status.
After these two steps, your next move is to determine whether or not you should be approved or not. The decision of your lender would rely mostly on your credit standing, your financial history and the appraisal of your collateral.
You can speed up the entire application process by first checking whether you are qualified for such a loan. If you think you are, complete all your requirements and financial paperwork beforehand, ready for submission anytime your lender wants them. It is also not a bad idea to check on your application every now and then, as it will call their attention for sure.
Who can qualify for a home mortgage loan?
Anyone who has a stable income and has a nice financial standing can well qualify for a mortgage. Those with poor credit ratings may also qualify, usually at the expense of increase interest rates. Furthermore, there are many ways by which you can achieve financial stability faster with home loans. You can for example, make a large down payment to lower your rate and to make it easier for you to get approved.
The key to success in your home mortgage loan is planning ahead. A home is certainly a major purchase and preparing for it should be the way to go. You should start to aggressively save as much money as you can years before planning on your major home purchase. Get as much help as you can, sell your investments and assets if need be, use your pension plan funds or personal savings – these are all good ways to get yourself the down payment you need.
How to Get Your Home Equity Refinance Appraised
Equity is the value of a property that is above the amount owed on it. Refinancing means taking out a new loan against your property to pay off your old bills and debts. The terms combined mean that you use the equity you have built up in your home for making payments or other reasons. By using equity that is stored in your home you can get new loan or mortgage. The new loan is of a greater amount than the primary mortgage. Approval for a home equity loan is assured on the basis of value of your house.
How to Get Your Home Equity Refinance Appraised
Equity is the value of a property that is above the amount owed on it. Refinancing means taking out a new loan against your property to pay off your old bills and debts. The terms combined mean that you use the equity you have built up in your home for making payments or other reasons. By using equity that is stored in your home you can get new loan or mortgage. The new loan is of a greater amount than the primary mortgage. Approval for a home equity loan is assured on the basis of value of your house.
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Reasons for Home Equity Refinancing
Different individuals have different needs so there is no specific purpose for which people refinance their home equity. However, some common reasons are:
* Debt Consolidation – If you have a number of debts to repay, you might find it hard to make the payments. Here you can refinance your home equity for consolidating the various debts. It reduces your monthly payments to great extent.
* Desire for a Larger Home – Those who wish to have a larger house opt for home equity refinance. They do not purchase a new house, as the interest rates on home mortgages are increasing day by day. Most people prefer getting their houses remodeled or renovated. Using home equity refinance, you can redo your house and fulfill your dreams of a better home.
* Change the Loan Program – Many people get their houses refinanced as their loan programs are not satisfying. If they wish to get the duration of loan increased, refinancing can be a good option.
* Refinance Cash Out – A good number of people have equity accumulated in their homes so they get it refinanced to get obtain the cash at lower rates of interest.
* Obtaining Lower Rates of Interest – Homeowners take advantage by applying a refinance loan to their existing rate of interest and save a lot of money.
Getting Appraised
An appraiser can evaluate the equity in your home on the basis of comparable sales in the area. The appraisal results are stored and can be done once or twice a year. You can get your home equity evaluated by appraisal inspectors and give the information to the company through which you will be refinanced. Moreover, various software has been developed by companies which appraise your home equity and provide information to the loan providers and banks to check the equity that is actually stored in your home. These kinds of software are used to remove the worry about your home equity being incorrectly appraised.