Mortgage loans applications
How can you apply for a mortgage loan nowadays? It is very simple and can be done even online without much hassle. Then again all the documents need to be prepared for the selection procedure. All the paperwork is to corroborate the statements you make in the form, so tax returns and pay slips will have to be faxed or delivered in person to your chosen lender.
Other documents you could be interested in include a credit report whose copy can be obtained via one of the three major credit bureaus that calculate the FICO score, where even several mistakes cause a drop in the score. It is a thing worth considering.
The Good Faith Estimate
Your loan officer will also submit documents for your consideration and signature. The good faith estimate contains all the closing costs that you need to cover before the loan is deposited, including administration charges, origination fees, house appraisal costs, underwriting fee and if applicable a broker’s fee, escrow and notary and title insurance costs. There will also be some local government charges as well. All in all, the final payment to be made may amount to several hundred dollars. That is the basic thing worth keeping in mind.
How Long Is the Procedure?
The whole process will take several weeks at the very least and will depend on the loan officer and underwriter’s workload as well as the timely delivery of the whole set of the documents from work and other banks if applicable.
Types of the Loan and Rates
The choice of a mortgage loan, largely determined by your needs and the nearest years, is also something you have to decide early on. The least risky option is typically FRM or a fixed rate mortgage loan with the rates stable throughout the life of the loan. The monthly payment consists of the principal you are about to take out, lender’s profit margin and a rate which differs from lender to lender but on the average oscillates around 5 or 6% with higher numbers for bankrupt people who re-apply for mortgage loans. In their case, with a low credit score, the rate will amount to 8 or even 9%.
Mortgage Loans Applications Are the Least of Your Worries
You have to remember that in the current climate the economy is in a state of flux, though predominantly in the slump. It makes people wish to choose seemingly cheaper options like ARM mortgage loans or interest only options. What they forget is that they will not be working towards building enough equity, which lessens their chances of using it to your advantage later on. With so many houses losing in value and put on sale, an overpriced house you have bought will be impossible to sell quickly or refinance if there is hardly any equity built. It seems that mortgage loans applications are the easier thing to do considering the whole context of homebuying.