Whether it is for refinancing or a new home, now is the perfect time to apply for a mortgage. Some analysts claim that lenders are not making new loans. The truth is that lenders make their money by lending money. Without qualified applicants, lenders are not able to turn a profit.
The first step in getting a great mortgage deal is understanding how the system works. While many lenders are wary about writing new loans, they are eagerly seeking qualified applicants. Lenders might be implementing strict lending standards but they are still desperately seeking qualified applicants. This might seem like a contradiction, but it is the reality of the current mortgage market. Getting a great mortgage deal is easy with these five tips.
Know Your Budget
After one look at your application, loan officers know exactly how much the applicant can afford. Applying for a more expensive loan is not impressing anybody. Instead, it is a sure way to get rejected. It shows that the applicant does not understand his or her own needs. By carefully calculating their budget, applicants can demonstrate a realistic understanding of their financial situation. Loan officers are more likely to lend money to applicants that under their financial situation even when the situation might seem dire. If you want a better understanding of your financial situation, sign up for a site like Manilla, which monitors your finances and gives you a clearer picture of how stable you are financially.
Consider Short-Term Loans
Loan officers are typically unwilling to invest in long-term loans when the economy is less than perfect. Most applicants want really small monthly payments. This requires that lender to wait years before realizing a profit. Asking for a long-term loan can saddle the lender with excessive risk. Instead, ask for a short-term loan. The monthly payments will be higher but the interest rate and total repayment amount will be smaller. Once the applicant has made several payments and demonstrated a certain level of reliability, the loan office is more likely to refinance and grant a long-term loan.
Many applicants make the mistake of accepting a loan from the first lender that approves the applications. This could be a costly mistake. Always consult several lending institutions when applying for a mortgage. Ask for an estimate before placing an official application. This will weed out over-priced lenders and narrow down the list of those that are serious about accepting new loans. Each official application will show up on the applicant’s credit report. Therefore, it is recommended to only apply for the lender that can produce the best estimate.
When shopping around, consider various types of lenders. Most applicants apply at their local banks. However, great mortgage deals can usually be negotiated at credit unions and mortgage companies. There are several financing companies and Savings and Loan firms that deal in mortgages. Investigate each option before making a decision. Leaving any option unexplored could mean passing up a great opportunity for a mortgage. If you want to explore all of your options, it might be a good idea to use a mortgage broker like Lending Tree, which can help you find the best mortgage option for you.
No does not have to mean no. If one lender is unwilling to assist with a mortgage, seek out another lender. One rejected application does not mean that a mortgage is unattainable. It means that particular lender simply wants to lose a customer. Customers are always in charge. When one business does not want to play nice, customers can take their money else where. Applicants fail to obtain loans then they think the lender is in charge. Being persistent means firing the lender that is being difficult and hiring one that is easier to deal with. It might take a while to find the right lender but persistent applicants will land a mortgage with good rates.
Seek Professional Advice
Applicants that are serious about landing a great mortgage are willing to seek the advice of professional financial counselors. A financial counselor can help correctly calculate the applicant’s budget and can determine what is the best interest rate and repayment plan. A financial counselor can determine if a budget can absorb balloon payments that come with an adjustable rate or if the payments are designed to cover interest without reducing the balance. There are many things that go into a mortgage. A financial specialist might be worth considering when seeking mortgage advice.