{"id":850,"date":"2021-05-04T13:44:00","date_gmt":"2021-05-04T17:44:00","guid":{"rendered":"https:\/\/bestofindy.net\/?p=850"},"modified":"2021-04-26T13:54:42","modified_gmt":"2021-04-26T17:54:42","slug":"top-10-things-to-know-when-getting-a-home-mortgage","status":"publish","type":"post","link":"https:\/\/bestofindy.net\/blog\/top-10-things-to-know-when-getting-a-home-mortgage\/","title":{"rendered":"Top 10 Things to Know When Getting a Home Mortgage"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"850\" class=\"elementor elementor-850\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-fb498f5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"fb498f5\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6237f61\" data-id=\"6237f61\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-9ffd980 elementor-widget elementor-widget-text-editor\" data-id=\"9ffd980\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Getting a home mortgage is not always the most difficult thing to do, but you need to take several factors into consideration.<\/p><p>Buying a home is one of the most important financial decisions you can make in your life. So, you need to familiarize yourself with the process involved in applying for a mortgage and what to watch when shopping for one.<\/p><p>Most people cannot buy a home without applying for a mortgage. It\u2019s a good idea to prepare in advance so that you can become eligible to apply for a home mortgage loan if you need it.<\/p><ol><li>Check Your Credit Score.<\/li><\/ol><p>Lenders <a href=\"https:\/\/www.nolo.com\/legal-encyclopedia\/what-to-know-and-do-before-taking-out-a-mortgage.html\" target=\"_blank\" rel=\"noopener\">check your credit score <\/a>when you apply for a loan. A credit score is a calculation that indicates your creditworthiness and determines your success in getting a loan. There are different types of credit scores, but most creditors look at your FICO (<a href=\"https:\/\/www.fico.com\/\" target=\"_blank\" rel=\"noopener\">Fair Isaac Corporation<\/a>) score.<\/p><p>A basic FICO score ranges from 300 to 850. If you score closer to 850, you are more likely to get a loan from a lender. There are different scoring formulas from FICO for your credit, which means that you may have several FICO scores.<\/p><p>You need to figure out your FICO scores, including the ones used in auto, mortgage, and credit card lending. However, your lender may use a different FICO score than the one found on the FICO website.<\/p><p>You can make contact with any of the three credit reporting agencies (i.e., <a href=\"https:\/\/www.transunion.com\/\" target=\"_blank\" rel=\"noopener\">TransUnion<\/a>, <a href=\"https:\/\/www.experian.com\/\" target=\"_blank\" rel=\"noopener\">Experian<\/a>, or<a href=\"https:\/\/www.equifax.com\/personal\/\" target=\"_blank\" rel=\"noopener\"> Equifax<\/a>). However, do not expect either of these agencies to give you the exact credit scores that lenders may use to establish your creditworthiness. You will instead have an idea of your position in terms of credit risk.<\/p><h2>2. Check the Different Options of Mortgages.<\/h2><p>There are several mortgage options based on the loan size, the term of payment, the type of interest rate, and whether they are part of a special program or not. You can learn about the risks of each type before choosing one.<\/p><h3>Loan Terms<\/h3><p>Loan terms range between 15 and 30 years, but you may be able to choose different options. Short-term loans usually have high monthly payments, low-interest rates, and low total costs. Long-term loans often have low monthly payments, high interest rates, and high total costs.<\/p><h3>Loan Types<\/h3><p>Most mortgages are viewed as conventional loans. If you are a first-time homebuyer, you may be eligible for a special mortgage. Some of the organizations that offer these types of loans include the U.S Department of Agriculture, the U.S Department of Veteran Affairs, the FHA (<a href=\"https:\/\/www.hud.gov\/buying\/loans\" target=\"_blank\" rel=\"noopener\">Federal Housing Administration<\/a>), and some other government agencies. You can research these programs and the restrictions they have.<\/p><h2>3. Get your Documents in Order.<\/h2><p>Upon applying for a mortgage loan, you are required to document your income, identity, employment status, and other factors. <a href=\"https:\/\/www.fool.com\/the-ascent\/mortgages\/articles\/tips-first-time-homebuyers\/\" target=\"_blank\" rel=\"noopener\">Gather your documentation<\/a> before getting into a lender&#8217;s office. Locate the following documents to start with:<\/p><ul><li>Pay Stubs.<\/li><li>Recent Tax Returns.<\/li><li>Marriage Licenses.<\/li><li>Brokerage and Bank Statements.<\/li><li>W-2 Forms.<\/li><li>Social Security Cards.<\/li><li>Employer\u2019s contacts for the Human Resource Department.<\/li><li>Drivers License.<\/li><\/ul><h2>4. Familiarize Yourself with Prepayment Penalties.<\/h2><p>When finding your perfect mortgage, one thing to keep in mind is finding out whether you will get any penalties for paying your mortgage early. Homeowners may double up their payments to reach their repayment term sooner when they have a cash windfall.<\/p><p>Ensure that you will not be penalized for reaching your term sooner. You can also<a href=\"https:\/\/bestofindy.net\/blog\/top-10-ways-you-could-benefit-from-a-realtor\/\" target=\"_blank\" rel=\"noopener\"> consult a realtor<\/a> to take you through the process of purchasing a house.<\/p><h2>5. Check How Much You Can Borrow.<\/h2><p>Lenders use different debt ratios to determine the amount you can borrow. Your monthly house payment should not exceed 28% of your pre-tax income. You can use a<a href=\"https:\/\/www.bankrate.com\/calculators\/mortgages\/mortgage-calculator.aspx\" target=\"_blank\" rel=\"noopener\"> mortgage payment calculator<\/a> to make estimates of monthly mortgage payments of various sizes.<\/p><p>Your mortgage payment and total debt should not exceed 36% of your pre-tax income. The lender will use the ratio that generates the lower payment. However, many lenders have generous ratios for qualification, but the stated ones in this section are the most common.<\/p><h2>6. Check Out the Types of Interest Rates.<\/h2><p>You can have an adjustable interest rate or a fixed interest rate. Fixed interest rates are not risky since they do not change the lifespan of a loan, making your monthly payments fixed. Adjustable interest rates, on the other hand, might be lower at the beginning but riskier over some time.<\/p><p>Due to market fluctuations, the rate may increase or decrease, which means that your payments can fall or rise.<\/p><h2>7. Buy an Affordable House.<\/h2><p>Lenders normally recommend that you choose homes that do not cost more than three times your annual household income. This is an assumption that you are making a down payment of 20% and do not have many debts.<\/p><p>Another way to determine how much you can afford for your monthly mortgage payment is a calculation that you should spend more than 28% of your pre-tax monthly gross income. A less expensive house enables you to pay the mortgage even with less money in the bank.<\/p><h2>8. Consider Smaller Lenders.<\/h2><p>When shopping around for a mortgage, do not only focus on the large national mortgage lenders. Some local or regional banks can offer special lending programs for first-time homebuyers.<\/p><h2>9. Do Not Use Your Credit Before Having the Keys in Your Hands After Your Application.<\/h2><p>Do not use your credit for anything between the time that you are successfully applying for a mortgage and the time when you are closing on the house. Your credit will be pulled at least twice by lenders upon originally applying and shortly before closing on the mortgage.<\/p><p>If there are differences between the two, like a higher debt balance or a new account, it could lead to delays and even eliminate you for mortgage qualification. Leave your credit alone until you sign the closing costs document.<\/p><h2>10. Watch Your Spouse\u2019s Credit.<\/h2><p>It is very common for newlyweds to purchase a house after tying the knot. You should, however, know that if you are buying a house together both of your credit scores and financial histories could be factored in when applying for a mortgage.<\/p><p>If you are marrying a person whose financial status is not up to the mark, you might consider improving it by paying off the loans or extra debt that you might have both taken before applying for a <a href=\"https:\/\/www.money.co.uk\/mortgages\/how-do-joint-mortgages-work.htm\" target=\"_blank\" rel=\"noopener\">joint mortgage<\/a>.<\/p><h2>Conclusion<\/h2><p>If you cannot purchase a house without getting a home mortgage, ensure that you avoid any instances that could prevent you from applying for one. Ensure that you stay on track by making informed financial decisions, and also consider consulting a financial advisor.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Getting a home mortgage is not always the most difficult thing to do, but you need to take several factors into consideration. Buying a home is one of the most important financial decisions you can make in your life. So, you need to familiarize yourself with the process involved in applying for a mortgage and [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":856,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[57],"tags":[],"_links":{"self":[{"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/posts\/850"}],"collection":[{"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/comments?post=850"}],"version-history":[{"count":8,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/posts\/850\/revisions"}],"predecessor-version":[{"id":859,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/posts\/850\/revisions\/859"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/media\/856"}],"wp:attachment":[{"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/media?parent=850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/categories?post=850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestofindy.net\/wp-json\/wp\/v2\/tags?post=850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}