If you feel that the time has come when you should buy a home, you also need to arrange the money for this big real estate transaction. Unless you are very wealthy, you have to depend upon financing of your project by a lender. Yes, interest rates are still low and the banks are also making available money to home buyers. But how do you make sure that you get the best mortgage deal that is perfect according to your circumstances.
Check your credit
For the loan officer, the most important document when deciding your mortgage loan application is your credit report. Check your credit report by obtaining a fresh report from one of the credit bureaus. Do not rush to apply for a loan if your score is average or poor. You are perceived as a risk if you have a mediocre score of 650-699. You are also awarded a mortgage rate that is higher than the lowest rate advertised by the bank. It is better to work on your credit in a bid to improve it before rushing to apply for mortgage loan.
Present your financial records and salary stubs
Do not approach a lender until you have gathered all the important documents that prove your credibility and trustworthiness. This is where the role of a mortgage broker comes into play. He is a professional who deals with loan officers on a daily basis and also knows the papers that are most important for them in deciding mortgage approval. If you can prove steady employment through salary stubs of last 2 years, chances of obtaining a good mortgage deal increase considerably. For self employed, income tax returns and balance sheets of last 2 years are a must.
How much of a down payment you are willing to pay
Most buyers expect banks to finance maximum money for the purchase of a property. It is true that banks can finance 90% of the value of a home but they do it only when they are sure of income and trustworthiness of the borrower who has a high credit score. To get a great mortgage deal, be ready to cough up as high a percentage of the home value that you can pay out of your own pocket. Lenders like borrowers who show sincerity by paying a high amount as down payment.
Do your homework
Just because a bank is ready to finance your project does not mean you should jump on to the first offer that you receive. There are dozens of lenders with varying mortgage rates and repayment plans. You should study these mortgage plans and make a comparison to find out which mortgage deal suits your circumstances the best. Also, you have the right to negotiate with a bank for lower interest rate if you have a high credit score and feel you deserve a lower rate of interest.
Consider using the services of a Mortgage Broker
Mortgage brokers study the market to connect you with the right rates and the right terms for your circumstances. They do it with patience, plain language, and superior market expertise.
Remember that mortgage is a financial product sold by lenders and they look for customers like you. Grab the deal that is most attractive as ultimately you will be repaying the money in a long time period.