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Tips to Mortgage Home Loan Application

Tuesday, November 4, 2014

It is important for you to be as informed as possible before you purchase a new property to avoid costly and time consuming mistakes. So here are some helpful facts and tips to bear in mind:

1. Pricing: Don't be tempted by promises of low mortgage rates. Ask the lending firm how long will the advertised rate be guaranteed. Be sure that there is sufficient time to close on your mortgage loan. Some mortgage companies promise their clients and make changes to the rate before the loan is closed. Some could claim that your lock-in rate expired, so make it certain that you have the date of expiration in black and white. In some situations, a lender may make efforts to delay the closing so they could break a client's lock-in. In some situations, the delay won't be within the control of the lender. Again, give yourself sufficient time for closing the loan. Delays simply a very common thing and everyone (builders, title company, and even yourself) is responsible.

2. (ARM) Adjustable Rate Mortgage (or Fixed Rate): The common connotation of people is that fixed is better than ARM. While this is sometimes true, it's not always the case. The key is knowing how long you plan to live in the house you like to get. An adjustable rate could be a better option, if you only plan to dwell in the house for a short period of time. The average time a home buyer will keep his or her mortgage is less than 4 years. Generally speaking, the longer you plan to dwell in the house you're buying, the better a fixed rate will suit your specific needs.

3. Negotiating Problems: It is very common for a certain problem to happen before closing a mortgage loan. Waiting until closing is usually not a good idea. For example, if you accept $500 at closing in lieu of the seller of the house loan making a repair and then after the closing you find out that the repair actually costs more, obviously you have made a bad decision. Whether your builder has agreed to add an item but has not or home loan seller has made a repair that isn't really acceptable to you, discussing a solution before the closing the mortgage loan will give both parties sufficient time to determine and analyze available options.

4. Closing Costs: Besides the down payment, you'll {need|have to settle some costs and other fees on the final transaction. Normally, costs for closing a mortgage loan range from 2% to 6% but will depend on the situation. A bank should provide a "Good Faith Estimate." It is a breakdown of all costs which will give you a good idea on things to expect at closing.

If you want to get more free legal advice on house loans, visit consumer credit legal service by checking out the link. You can also check out this page to get more tips regarding house loans.