Mortgage

In basic terms, mortgage loans are loans in which a certain property is pledged to the lender as a way to ensure repayment of the debt. If a borrower is unable to pay the loan at the agreed time, the creditor will seize the pledged property. For borrowers, it is important to remember that attached with the principal loan are interest charge and other fees associated with the loan. In this article, we will discuss how to apply for mortgage loans:

Ste 1: Look for a Federal Housing Association or FHA-authorized lender. You can use the internet to search for such lenders. Determine how much money you need to take out and create a repayment plan. Once these are done, you can proceed with sending your application to the lending company you chose.

Step 2: After your loan application, you will be asked for a specific case number. This number will remain confidential and your assigned loan officer will be there to meet up with you to arrange the loan.

Step 3: The next step involves mortgage process underwriting. This is the part where the borrower’s eligibility and capacity to take out mortgage will be evaluated by the lender. A “needs” letter will be sent to the borrower and it will outline the required documents to qualify for underwriting.

Step 4: once the underwriter evaluates the application, the lender will choose which type of loan to grant the borrower. A borrower’s collateral, capacity to take on a loan, capital and character will be reviewed.

Step 5: The last step is the approval or rejection of the mortgage application. If a borrower passed the evaluation, the case will be directed to the closing department where the documents will be signed and the closing is prepared. The borrower needs to gather certain documents like a title company or a closing attorney to close the deal. Once all the necessary documents are presented and passed inspection, the process of taking out mortgage loan is completed.

Once the application is passed and the process completed, the borrower can now have the funding needed to purchase a house.

Comparing various mortgage quotes is essential to find the best possible deals for your unique needs and budget.

Most people needing home loans turn to private moneylenders to obtain extra money to fund their venture to real estate investing. Note that there are various types of real estate loans available to borrowers by these private lenders. However, they also offer traditional mortgage. In this article, we will discuss the benefits borrowers will get from taking out mortgage from private lenders:

• Most loans from private lenders are underwritten and are easily obtainable despite not having excellent credit scores or credit ratings
• Mortgage loans from private lenders are often made to fit according to a borrower’s specification

Because banks and similar institutions are using public funds and investments to grant loans and credits to borrowers, they do not lend fund to people who are deemed as high risk, particularly those with low credit scores. Apart from this restriction, government sponsored groups like Freddie Mae and Freddie Mac, have placed several underwriting guidelines that make it extremely hard to secure mortgage loans. In order to qualify for mortgage loans provided by traditional financial sources, borrowers need to have excellent credit report, credit rating and a credit score of no less than 700.

Obviously, not many of us can afford to have excellent credit scores and credit ratings especially with the way the economy is going. For people who do not qualify for traditional mortgage could always turn to alternative funding sources like private lenders to get the money they need to purchase properties.

Unlike banks and similar institutions, private lenders use their own funds to provide mortgage to people with less than perfect credit histories. In exchange for the loan, borrowers will be charged with higher interest charge and are usually secured to some or other assets. Additionally, the loan will require high late payment charges in case the loan is defaulted.

There are different types of loans offered by private lenders and the most common is average mortgage loans. These loans are used mainly to purchase real estate, which is then pledged with the lender as collateral. The repayment period from this type of loan spans for several years and in some cases, up to two decades. The current interest charge for mortgage loan from private lenders is around 5% to 6%.

Not all mortgage applicants are lucky enough to receive pre-approved mortgage because of credit crunch. However, if you are pre-qualified for a mortgage loan, it is important that you use this to be approved for a mortgage loan. Note that pre-qualification for a loan is different from pre-approved mortgage. We will discuss the difference between these two mortgage elements in this article.

A borrower is considered pre-qualified for a mortgage loan when he or she was able to satisfy a particular set of criteria set by the Federal Housing Authority or FHA. If a person is pre-qualified for a mortgage, he or she can move on to approval of financial status, which will be evaluated by the required authority. Once this is completed, then the borrower is now considered as having pre-approved for a mortgage loan. The only thing that separates pre-qualified and pre-approved mortgage is the credit worthiness evaluation of lenders.

Below are the requirements to pre-qualify for a mortgage loan

• Worked with the same employer/company for at least 2 years
• Steady or increasing income for at least 2 years
• Excellent credit report showing good credit performance
• For borrowers who filed bankruptcy in the past, demonstrate a steady improvement on your credit score for the past 2 years
• For applicants who’ve been through foreclosure, present 3 years post of the completion of the foreclosure process
• A typical mortgage payment is 30% of a borrower’s income. Therefore, borrowers need to present their monthly income average.

Requirements for pre-approved mortgage

• Copies of various financial documents proving your excellent financial status
• Attach the documents with the pre-approved mortgage application

Once you got all the required documents, send them to the designated loan authority and wait for their response. You might be notified for an interview to discuss the documents you presented. If everything goes well, then your loan is pre-approved. Pre-approved mortgage means that you are qualified for instant loan and under any circumstances, will not be refused for the amount you qualify for.

Comparing mortgage quotes can help you find the best possible deal for your individual needs and budget.