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Most mortgage preapprovals are valid for 6 months. It makes sense to obtain the approval first before you have settled on a property. If you are keen on buying a house, it will probably take you 2 months to find one and 2-3 months to close the mortgage with bank. Getting preapproved will help you know what loan you qualify for, the expected down payment, what your loan installments will be, closing cost expectations, your credit score and any alternatives you have to raise your credit score.
Applying for a mortgage comes with a considerable amount of paperwork. Reading the fine print is crucial. One attribute associated with a mortgage is the charges banks levy in various forms. Key among these is the application fee. You should not have to pay it though and here is why.
As it is, a mortgage is the most expensive personal finance project most people will face in their life time. Therefore, the last thing you need is to incur an unnecessary expense. Some lenders define the application fee as a charge for the property appraisal and the credit report. However, this is not always the case. Many banks charge the fee as a separate cost for soliciting, processing and negotiating the mortgage.
Purchasing a home of any size is an expensive exercise, especially when taking into consideration the fact that you will require a down payment of sorts before most banks or other lending institutions will consider granting you a mortgage. Below are a few hints and tips that will not only help you gather those nickels and pennies, but that will help convert them to dollars so that you can save as much as possible for your down payment as quickly as possible.
To save a down payment successfully, you will need to have a strict budget in place – after all, you will need to know where your money is going to each month before being able to see how much of it you will be able to save. Your budget should include your income from all sources as well as all of the expenses you pay out each month. Once all of these have been listed, you will be able to see how much money you have left over that can be allocated to saving the required down payment. If you find that you have little to no funds left after paying out your expenses or that you are paying out more than you earn, you will either need to cut expenses or find a way to increase your income.
Are you looking to buy a home in Philadelphia but are not sure where the best place would be for you to settle? If this is the case, take a look at our handpicked selection of areas below – there are sure to be at least a few of them that you will be able to call home once you and your family have moved in and settled down.
Not only were a few of the Revolutionary Wars fought in this area; to this day, there are numerous older homes that abound here as well. In addition, you are easily able to travel between your office or local shopping malls and a plethora of lush and serene public parks when you need to get away from it all. Schools in the area are classified as exceptional; incomes are higher here than in other parts of the state and more than 650,000 people from all walks of life are happy to classify it as home.
Many potential home buyers don’t realize that it is actually required of them to obtain mortgage pre-approval before putting in an offer on a home. Although many people are aware of what this document is, there are a few important aspects pertaining to it that need to be taken into consideration.
As few as one out of every six pre-approved home buyers end up taking the mortgage that they received the initial pre-approval for. However, the lender still has costs that to cover that are associated with the processing of this document, and these do need to be recovered somehow. As a result, the interest rates quoted on pre-approval documents can end up being as much as 0.2% higher than current market rates – which can make a substantial difference in the long term.
Many people are so excited about the prospect of buying a home that they completely forget about the fact that they need to get approved for a mortgage before they even start looking at homes. However, despite the fact that mortgage pre-approval is required by most realtors, research has shown that less than 10% of buyers are taking this crucial step beforehand.
What is a Mortgage Pre-Approval?
To get approved for a mortgage, you will need to submit a host of documents to your lender, all of which will determine how much of a mortgage you will be able to qualify for. Documents that are needed to get pre-approval include pay stubs, your W-2 documents from the past two years, your previous 2 federal tax returns, at least two months’ worth of bank statements and the most recent copy of your credit report. In cases where you are self-employed, you may find yourself having to provide at least one full years’ worth of federal tax returns so that your lender can determine what your average income has been during this time.
With interest rates being as low as they are at the moment, more and more people are considering the option of purchasing a home instead of continuing to rent at higher prices. Although the process of buying a house can leave you feeling giddy with excitement, it is imperative that you put your wish list together before considering putting any offers in.
Before purchasing a home – even in what seems to be a desirable neighborhood – it is essential to conduct intensive research. In most cases, issues such as poor or non-existent public transport routes, a lack of decent amenities, low quality schools and crime levels may only present themselves after you have moved in, and by then, you may find it close to impossible to sell up and relocate again. If a realtor gives evasive answers or seems non-committal when asked about the above mentioned issues, it will be best to purchase in a different neighborhood.
Regardless of whether you are a first time home buyer or you have been a home owner for a few years already, chances are that you have heard about the recent drop in the stock market. This has resulted in an ideal opportunity being provided for anyone who is in the market to buy their first home or even refinance an existing property.
According to The Mortgage Reports website, 20 and 30-year conventional fixed-rate mortgage rates are currently sitting at just under the 4% mark, and purchasing power of home buyers has increased by as much as 10% as a result. To receive the most benefit when refinancing, you will need to ensure that your refinancing costs are not going to be too high. Once you see how much you will be able to save each month, you can consider using that money to put towards other expenses. The lower interest rates will also make it easier for you to get on to the property ladder if you are a first time buyer.
After refinancing a mortgage by means of the cash out refinance option, you will have a lump sum of cash on hand because your new mortgage loan will be for a larger amount than the existing mortgage loan on your home. In most cases, you will be able to spend this cash lump sum in any way you choose; however, it is important to spend it wisely. Below are a few great ways to use this cash lump sum so that you will be able to get the most benefit from it.
If you have any form of consumer debt, chances are that you will be paying high amounts of interest on it each month – in some cases, as much as 20-25%. Using your cash out refinance option will not only help you save thousands of dollars in interest on your debt over the long term; in most cases, repaying all of your consumer debt will also free up a large portion of your monthly pay check, which will in turn provide your budget with some much-needed breathing room. Having little to no debt will also allow you to save more money each month for future expenses that will need to be covered.
Home buyers who have intentions of staying in their properties for more than a few years will undoubtedly want to have renovations performed at some stage. Regardless of whether these are going to be minor, such as a coat of paint, or major, such as adding on a room or two, it will be more beneficial to make use of cash out refinancing instead of an equity loan to cover the costs.
When obtaining a cash out refinance, home buyers will be able to obtain a larger sum of cash than if they had opted for a home equity loan. This option allows home owners to obtain a new loan that will pay off the current mortgage, while also being able to take out the equity (the difference between what the home in question is worth and how much is still owed on the mortgage for it). The equity is then paid out to the home owner in the form of a lump sum of cash, which can then be used to perform any renovations that need to be done.
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