Starting the Home Loan or Refinance Process
Whether you’re a first time home buyer or you’re ready to refinance your home, the process can be daunting. While lots of people dream about how many bedrooms they want or where they’d like to live, very few daydream about prospecting the perfect mortgage company to fit their needs. Whether a home-buyer is looking for a mortgage company in New Jersey or New Delhi, they all want to receive quality customer care. That’s why the team at Oceanside Mortgage Company wants to provide as much information possible about the mortgage process from start to finish so we can effectively communicate to the public a better understanding of how it works. The process can be daunting, especially for first time buyers. Even people refinancing after 15 years of paying on a mortgage may be putting off a home refinance simply because they are unsure where to begin or who to talk to about options. With the right guidance, however, securing a mortgage or refinance can be simple and painless. That’s why we’ve compiled a list of the steps future homeowners should take before applying for their first mortgage. There’s three important things to remember when you’re ready to secure a mortgage: diminish your debt, check your checklist, and test your limits!
Diminish Your Debt
Paying off old debts, or as much of them as you possibly can, is a great way to increase the amount you are able to borrow. Lenders take into account car payments, student loan payments, and other debt borrowers have incurred and the amount they’re already making in debt repayments every month before deciding how much to lend. If it’s possible to pay off your car or student loan bill in the next few months, you may want to finish off those payments before refinancing. On the same vein, avoid large purchases before securing a home loan or refinance loan.
Side note: If you’ve already found the home of your dreams and don’t have extra time to spend paying off old loans, look into mortgage refinance options, like FHA Streamline Refinancing, once your other large debts are paid. Refinancing could save you hundreds if not thousands in the long run.
Check Your Checklist
Start making a checklist of documents and information related to your home buying process. For first time home-buyers, put together the following documents which lenders will use to determine the amount you can take out in a loan: your last two years of tax information, three months of bank statements, and one month of pay stubs from your employer(s). Be prepared to explain any unusually large deposits or withdrawals to your account and make sure that all the information presented is recent. For homeowners looking to refinance, you likely won’t need much of that information. For example, to get an FHA Streamline Refinance loan, homeowners don’t need income paperwork. Having documentation to prove that they paid their mortgage on time every month for at least the last year is enough. Your lender will thank you when you show up with these documents on hand.
While you check off your list of documents, check your credit as well. Your credit score is needed to determine loan amounts for first time buyers, so make sure yours is at least at a 580 before attempting to secure a loan. Those looking to refinance likely already have a high enough credit score. Since you’ve already passed a credit check before, it’s unlikely your score has changed significantly enough to hurt your refinance options.
Lastly, check the housing market. On December 27, we reported that both interest rates and the overall cost of a home are likely to increase in 2018. That is still true. However, because most of the homes for sale in the U.S. are larger houses and millennials are going to be the bulk of housing market, real estate developers are likely to focus efforts on building new starter homes. These homes will better meet the needs and price limitations of most first time buyers since they most likely don’t have enough buying power to secure the large luxury homes which make up almost half of the homes available for sale in the United States. For individuals looking to refinance, you can get an interest rate as low as 0.5% with Streamline Refinancing, so fluctuations in the housing market shouldn’t affect you much.
Test Your Limits
Always do as much research as you can before buying your first home. Mortgage calculators can estimate how much an individual able to borrow before even to talking to a mortgage advisor. This information can help buyers understand how much they can likely afford before hitting the bricks and checking out open houses. Then, once you’re ready to secure a loan, check with at least a couple of lenders before deciding who to choose. This will ensure you’re getting the best deal possible. Different lenders may offer differing mortgage loan interest rates, necessary down payment amounts, or total loan amounts depending on the lender you choose, so know your options before you commit. For those looking to refinance, using a team which specializes in refinance options will help you get the best contract for your refinance loan.
Do you have everything ready to talk about your mortgage loan or refinance? Call Oceanside Mortgage today to talk about your home loan or refinance options.