Home Loan Forum

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Important Things to Do When Obtaining a Home Loan

• Home Loans Experts

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• How hard is it to acquire a home loan?
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• It should be easy if you have all the
  requirements--a good credit score, savings, and
  permanent employment. Lenders are going to find
  you favorable and easily grant you a mortgage if
  you have all the requirements.
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• Anyone who plans to buy a house will need to,
  first, find a mortgage broker. A broker can do a
  lot of good since he or she will have the
  experience and knowledge necessary to find a
  lender who can offer a competitive mortgage rate.
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• Get help from a mortgage expert
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• Finding the best mortgage broker is crucial to
  your success in getting the right mortgage deal,
  so make sure you spend enough time making the
  selection. Buying a house is not a walk in the
  park but when you have someone with enough
  experience it is sure going to be a lot more
  bearable.

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On credit score and its importance

• One of the first things a mortgage broker is
  going to ask you is what your credit score is.
  Your credit rating is going to have a huge impact
  on your home loan application. It's because your
  score is an indicator of how much risk you pose
  to lenders.
• Your score represents your financial
  responsibility. If you are on time with your
  payments and make sure that every debt is
  settled, then you are going to have a good credit
  rating. Those who have a high score are
  considered ideal borrowers because they have
  proven that they are financially responsible. 
• On the other hand, people who repeatedly miss
  payments or don't pay at all will have very low
  scores. Lenders do not like borrowers with a poor
  credit rating because they are more likely to
  default on their mortgage payments.
• If you have a poor score, then your broker will
  advise you to improve it. You won't be able to
  get competitive rates when your score is low. Or
  you won't get approved at all. 
• There are several ways to improve credit rating.
  Among them are making sure you stick to your
  monthly credit card payments. Another thing you
  can do is consolidate your debt so you can pay
  everything you owe more efficiently. 
• The moment you have raised your score, you can
  start applying for a loan and if you meet the
  other requirements, then you will be a step
  closer to buying your own house.

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On proving financial ability to pay off the loan

• Borrowers also need to show proof that they have
  a stable source of income. Lenders may ask you to
  produce an employment record or history. It is
  important that you establish your ability to pay
  off the loan. However, there are some people who
  cannot produce the necessary documents to prove
  financial ability like freelancers and
  contractors. Although these people may have the
  money to pay for the down payment and cover
  monthly payments, the fact that they cannot show
  proof of stable employment will make it hard for
  them to qualify for standard mortgage.
  Fortunately, there are different types of loans
  that they can qualify for like contractor
  mortgages. These loans are specifically designed
  for people who don't have the typical job.  Some
  individuals may not have enough experience, like
  first time home buyers and young professionals,
  to meet the requirements of lenders. Someone who
  just got out of school and still new to the job
  may not have a stellar credit rating yet. These
  people can still obtain a loan through the help
  of guarantors.
•  Parents are great examples of guarantors. They
  can vouch for their children during the mortgage
  application process and take out security from
  their property. Guarantor loans are great for
  these kinds of situations. Another type of
  mortgage that individuals can acquire through the
  help of parents or other family members is the
  family pledge home loan. This will allow
  borrowers to buy a home using the property of a
  family member as an added security.

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On not having enough paperwork to submit to
lenders

• There are individuals who may not be able to
  submit the complete documents when obtaining a
  loan and therefore not be able to take out a
  mortgage. Examples of these are self employed
  individuals and freelancers.
• These individuals are not going to pass the
  conventional verification process of lenders
  since they don't have all the necessary
  documents. But it does not mean they cannot
  qualify for a mortgage.
• They can approach lenders who specialize in low
  documentation loans. This type of home loan will
  not require the usual verification process, so it
  should make it easier for people who have the
  financial ability to buy a house but not possess
  enough documents.

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On getting the right mortgage type

• Anyone who wants to get a home loan would
  naturally want to have lower monthly payments.
  This is possible by choosing the right type of
  mortgage rates. Choose from a fixed or variable
  rate. See which one works best for you.
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• By working with a mortgage broker and learning as
  much as you can about mortgage you will be able
  to find the best home loan possible.