Mortgage Loans Guide

Though the process of getting a mortgage loan is time consuming, it can be paid over a period of 15 to 30 years. It saves money in the long run. In order to apply for a mortgage loan, it is very essential to handle well the personal finances and also to maintain a good credit history as the lenders will look in for such information.

There are many banks and other mortgaging agents offering this service with different features. The rates offered by all these different agents vary due to economic, political and various other reasons. It is essential to look into the right type of mortgage loan, which would suit your situation. These mortgage loans may be received either directly or through intermediaries who offer such services. However, the brokers charge a commission of a certain percentage on the final mortgage amount.

You should provide information related to income, assets, debts and the initial amount or the down payment you are going to make. This is for the lender to decide the amount for which you are qualified to get the loan. Another important thing to be done is to obtain a copy of your credit history to check the accuracy of the details.

Normally the down payment is 20 % of the cost of the property purchased. If the down payment is more than 20 %, then the interest to be paid every month is relatively lower. If the borrower is not able to make a down payment of 20 %, they can avail the mortgage loans under many other schemes. The interest rate will be higher. The borrowers who buy the property for the first time can avail $10000 from the IRA without any penalty. There are also methods of obtaining the mortgage loans without providing the proof for the income, but the rate of interest is higher.

It is wiser to get the right advice and choose the profitable way of availing the mortgage loans.



By: Herald Gumpsten

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There are so many different factors involved in the refinance home loan process that you might end up really getting lost. Here are helpful tips.

The refinance home loan process can be so confusing if you have absolutely no idea about what is involved in this process. There are 3 things that you can do to give yourself the edge and get a much understanding about this process. As the old saying goes “Knowledge is Power”; and nowhere is that more evident than in this case. The more you know, the better off you will be when you final come through the entire process.

Do Your Research

The very best thing that you can do before you even start the refinance home loan process in earnest is to spend some time doing research into the local and national lenders. There are several different ways to go about researching; online searches, talking to friends and family for recommendations and talking to several over the phone. If you decide that the only type of research you are going to do is online; you are very likely to be completely swamped and probably very confused by the sheer volume of information that you will find. You might be wiser in getting recommendations or referrals from family and/or friends; or calling a few that are in the telephone boo or that you have heard good information about.

KNOW the current Rates

If you already know the current interest rate that you are paying, this is half the battle in the refinance home loan process. This will tell the lender how much you are currently paying in interest. You will also want to get to know what the current going interest rates are so that you are prepared for whatever may come your way. Knowing this information tells you what you are getting into.

Be Totally Prepared

This means that you need to know and have written down every bit of information that you will need to provide the lender when you go to meet with them the start the refinance home loan process. You will definitely need to have all of the documentation that relates to your current mortgage; this includes the statements and/or payments coupons from your current lender as well as the original paperwork that you received at the start of the original loan. All of this information is un-necessary if you are refinancing your mortgage through the lender that you are already working with; as they already have all of this information.

Miscellaneous Thoughts

There are some other things that you really need to consider before you initiate the refinance home loan process. One of the main things to think about and really consider is why you are looking to refinance your existing mortgage. Are you refinancing because the current interest rates are lower than what you are paying now? Are you thinking that you will be able to get a lower monthly payment by refinancing? You might; but then again, you may not. Make sure that you are completely prepared for the possibility of being turned down and ask for the specific reasons for rejection.



By: Julian Lim

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Couples go into their first mortgage with stars in their eyes. When additional bills come up, the budget is skewered. Paying the monthly bills and the mortgage installment becomes stressful. But there’s no way out but a refinance mortgage. This time around, couples should have learned their lessons. They should want a better deal instead of shuddering at the thought of a new loan when they’re still looking at a huge unpaid balance from the first loan.

Traumatic Experiences With The First Loans

Getting your first mortgage was exciting and thrilling. You went into raptures at the thought that of having your own home. You wanted to hurry up the loan process. Anyway, you could afford the monthly bill of $798.36 for a $150,000 home. What you didn’t include was the monthly residential tax plus other add-on fees and complexities.

Think like the shrewd taxman. If you don’t have the savvy for tax matters, let an expert help you. An independent mortgage adviser would be a smart choice. He or she looks at the issue objectively being under no obligation to the mortgage company. Your refinance mortgage will fare better with experience and sound professional advice.

Perhaps when you got your first mortgage, several options were bypassed because you wanted to rush your pre-approval, even pestering the sullen loan agent to get your loan application on top of the pile. The biggest surprise for first time borrowers is contending with the downpayment for the loan, which is pegged at 20% of the total loan amount. If they do not have enough money for the downpayment, they agree to have the private mortgage insurance added to the fee, which makes the loan expensive and more than they can afford in the end.

Another mistake is getting an ARM when you have a fixed income. With the uncertainty of the economy, interest rates are likely to swell, affecting your budget. The ARM is perfect when interests are at a low and hibernate there for months on end. Fortunately, if you have a short-term adjustable mortgage, Federal cuts could cause a drop in interest rates.

A Tip or Two

To qualify for refinance mortgage, get pre-qualified with several lending companies so you can compare options and prices. But don’t let the credit companies pull your credit history because each pull drags down your credit score. Once you get pre-qualified, choose the company with the best offer to look at your credit history.

Watch out for high closing costs. These indicate that you won’t get a good deal. You’re trying to sort out your finances through this refinance mortgage, not make it more messy. Avoid lenders charging closing costs that are too high, even if they offer lower interest rates.

Check out for prepayment penalties. Nobody likes to be fined for paying off a loan ahead of schedule. Frankly, it doesn’t make sense. But that is how lending companies survive and it is good business logic.

Give honest answers to the questionnaire. A falsehood can undermine your application for a loan when you really need it. You are dealing with experts who have been through hundreds of applications. If there are further requests for information, provide it promptly to avoid further approval delays.

To protect yourself from more surprises, be privy of the company’s policy on early payment and get all the documents pertaining to your refinance mortgage. The mortgage documents will be your reference as you go along.



By: Rony Walker

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Words are fun. But how you use them can be extremely powerful. They can immediately change your image from a rookie loan officer into a top producer instantly. Here’s how; the words you use when dealing with a mortgage prospect affect the conversation, and can even be the deciding factor in whether or not you get the loan. Yes, what you choose to say and how you say it, will decide how much money you earn this year.

Here are some key phrases I always teach my students, to ask their customers:

“Have you seen any other rates that interest you?”

This is a great question to ask, in order to gauge how much the prospect has been shopping around. If they have a rate already in mind, you can see if you can beat that rate. If they tell you an interest rate that seems too good to be true, and they are dead set on that rate, you’ll want to know this upfront so you don’t waste your time. Using this phrase gets the prospect to unknowingly show their cards.

“How soon would you like to close?”

This gives you an idea of the customer’s timeframes and motivations. If they are ending a lease/selling a house in the near future, and are buying a property, you’ll want to make sure you are aware of the timeframes. Can one lender close faster than another? Yes. And with experience, you’ll know who to place the loan with. You’ll want to set the customer’s expectations regarding the loan process and the timeframes involved. Asking this question puts you on the same page as the prospect, and lets them know that you are working with them to get the deal done.

“When would you like to get started?”

When the sales call is going well, and you can feel the conversation flip over from “you and me” into “us and we”, use this phrase to get the customer to say “yes” to you. When you can feel the sale about to be made, the response is almost always, “I’d like to get started right now. What do I have to do?” This is your green light. Take it.

“What else should I know regarding your finances? I want to make sure I can get you the lowest rate possible.”

I love this phrase, and it’s even included on my Sink or Swim Worksheets, http://www.loanclosingsystem.com I use it to uncover all those little nasty “surprises” that seem to come-up along the way. Customers won’t tell you their dirty secrets, but this sentence will diffuse financial bombs before they explode. Believe me, it will save you a tremendous amount of time and countless headaches!

“How does that sound?”

I use this phrase to gather a response from the customer and get feedback. When the conversation dies down and you are the one doing most of the talking, stop yourself. Ask, “How does that sound?” and wait for a reply. It gives the customer a chance to catch his breath and respond.

“Which loan program do you prefer?”

This phrase changes a “yes-no” decision into to a “yes” decision, and assumes that the prospect is moving forward. By using wordage that ASSUMES that the loan is underway and heading to the closing table, the customer will come along with you for the ride. Like magic, the loan process has begun!

“To get you the lowest rate, I’ll need to gather a bit more information from you. Do you have a few minutes?”

Never, ever, EVER say the word “application”. It scares people, and can cost you the loan. What I always say is, “I’ll need to gather a bit more information to see how low a rate we can get you, do you have a few minutes?” This way, you begin filling out the 1003 application, without the prospect knowing that it’s an APPLICATION. Also, you’ve re-emphasized the benefit of a LOW RATE. And it’s the rate incentive that propels them to complete the next step of the process.

And my all-time favorite key phrase… “Ok, now we’ll just need to take a quick peek at your credit. What’s your social?”

With identity theft at an all-time high, getting over this hurdle is the most difficult in the application process. You can do the loan, or quote an accurate rate without the credit report, but getting it can be troublesome. Never, ever say, “we need to pull your credit”. To a loan prospect, this is scary talk. They think…“PULL MY CREDIT!, Oh my god! That means that there will be inquiries on my report, my score will drop and I’ll be blacklisted and never get a loan”. Instead, just say “We need to just take a quick peek at your credit, what’s your social?” Can you see how non-threatening this better phrase is? It isn’t so scary after all, is it? Just a little, itsy, bitsy, teenie weenie, small, tiny, short, sweet, quick, mini peekie weekie.

How many deals have you lost by using the “wrong” words? I bet it’s more than you care to count. On your next loan, try some of my phrases, and you’ll immediately see an impact to your bottom line.



By: Robert Lawrence

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The term bad credit loan refers to a type of loan which is designed for individuals who find it difficult to obtain a loan through the normal channels. This is usually because they have a less than good credit history. This type of loan is invariably more expensive than other types of loan and is not something to be entered into lightly or without a lot of thought and consideration. It is usually not too difficult to find a bad credit loan if you happen to be a property owner with more value in your house than any debts secured on the property. For tenants and non property owners it is not quite as easy as the lenders are always looking for some sort of security against any money they lend to somebody with a poor credit history. You can’t really blame them can you?

For these individuals with no security to offer there is the unsecured loan which does not require them to offer anything as security. These are freely available albeit with a higher rate of interest. When it comes to an unsecured bad credit loan it’s a different matter. These can be pretty hard to get hold of and invariably will come with an exorbitant rate of interest.

The interest rate on bad credit loans is in the form of an APR (Annual Percentage Rate). You should check out several lending companies, ask about their rates of interest and loan terms, and check out their loan process. It is understandable that lenders charge this high rate of interest as it is quite a high risk strategy to lend money to somebody who has in the past apparently failed to make payments on some sort of credit agreement, be it a mortgage, a loan, credit card etc. The interest rate on bad credit loans normally depends on the amount of time between credit problems and the loan application.

To sum up, bad credit loans are very popular these days, which shows there must be a lot of people with bad credit histories. These loans can be the only real answer to a poor credit situation that the individual may find themselves in. Bad credit loans can also be very useful for any individual in any short-term financial situation. These loans are available from many companies and you will receive expert financial guidance to help you improve your personal credit history and get back on the road to financial freedom.



By: James Hunaban

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I have a web page that explains the mortgage loan process and I thought it was comprehensive but I get at least one question a day about the loan process. Perhaps it is unclear because many things actually happen in parallel.

First of course, you should shop interest rates and find a local mortgage broker that you feel comfortable with, is experienced and reputable.

Application:

You go into the brokers/bankers office and you fill out a 1003 (loan application). You also bring copies of your bank statements, retirement accounts, 401ks, W2s and tax returns and what ever else the Loan Officer requested. The Loan Officer makes copies of the documentation and gives you back your originals.

An application can be filled out on line but I don’t recommend you do that. Completing an On Line Application is acceptable only IF the company is local and you know them or have spoken on the phone. This can save you a trip to the office. But you should never just fill out an application on line if you don’t know who they are or if they are not local (even if they are a major branded company). Do not complete any request that suggest multiple offers as these companies sell your information over and over.

During the time you sit with the loan officer he will review your documentation and with most companies he will pull your credit report while you are with him.

During your conversation the LO will tell you “based on the information he has” that you qualify for “this type” of loan. He should also at this time tell you about all loan types you qualify for. He will also discuss interest rates and terms. He will have you sign several disclosures.

At this point you guys decide on your course of action. HE SHOULD AT THIS TIME GIVE YOU A GOOD FAITH ESTIMATE. The LO then puts all your official paper work in the file and turns it over to the processor.

Processing:

The processor makes sure all the documents are in the file, puts the paperwork in order, enters it into DU or LP (automated systems) and then receives an automated approval or turn down. This is always “subject to” supporting documentation including appraisal, inspections, and title work.

The processor then verifies employment, verifies residence, orders an appraisal, and orders a title. I’m not going to cover all the documentation needed but this is when everything starts happening at the same time.

When the processor has received all these verifications, the appraisal, and basic title work, they will review the file again and if it still qualifies they will forward the file to the lender’s underwriter.

Note: At this point she does not have a title policy or guarantee, but the title company has reported that there are no clouds on the title. Shame on the processor if she forgot to order this because it can delay your loan later. The actual title policy is not issued until later when the underwriter gives a “clear to close”.

Underwriting:

The lender’s underwriter then reviews what is in the file, runs the numbers, and verifies that all of the documentation is present and that it supports the DU or LP approval.

They also review the appraisal and the title at this time. This is part of the underwriting process. If there are problems in the appraisal review or title they will address them to the processor.

The processor will communicate with the LO and appraiser and/or title company to resolve the issues. This is part of the underwriting process. The processor collects the requested “stuff” and then forwards all information to the underwriter.

The underwriter is then happy and gives an “ok to close”. This ok is usually subject to receiving the title insurance policy from the title company. The title company faxes or transmits electronically the info to the lender. Then the Lender sends the closing documents to the closing company. This can sometimes take two to three days.

You have an appointment to close. You sign the documents and your loan is closed and you get the keys.

Processing should only take a week after you have provided all the documentation requested. The underwriting normally takes about 14 to 28 days. This time includes communicating with the processor if there are any deficiencies.

Every loan file is different; each Lender has different requirements and markets vary, so it is impossible to give an exact duration for each step.

The Key: Understand the sequence and demand your loan officer gives you full details about what is going on. If you don’t understand don’t be afraid to say so. This is YOUR investment. Demand the facts. LO’s sometimes use industry terminology, ask what they mean if you don’t understand!



By: Connie Sanders

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