How to boost your eligibility for a mortgage

Taking out a mortgage is a big financial commitment. It is the first step to owning your home, which could be key to financial security. There is a huge amount of loans in your mortgage, which means that you should always maximize your chance to get one when applying. These are some of the top things to do to get your mortgage application approved.

1. Are you ready for your credit report?

Lenders identify your credit score as one of the main factors that determine whether you can get loan approval, and you are eligible for some type of interest rate. That’s why it’s important to review your report at least once a year to make sure everything works. If there are any mistakes that affect your credit score, you may miss out, it will be a huge difference, interest rates may soar, and if your score is not enough, you may even be denied a loan. If possible, try to get a credit report at least six months before applying for a loan. If you find any errors, you will have time to review and contact your credit agency. You can also use this time to start raising your score by avoiding putting your finances at risk and not opening more credit lines.

2.Efforts to increase your debt-to-income ratio

Your debt to income ratio is the ratio of the money you earn to the money you owe. Lenders also take this into account when you apply for a loan, so it may be a good idea to minimize your debt or increase your income. Use a credit card to pay more debt to increase your ratio, or to repay outstanding loans you may have. You will be a more ideal candidate, and you may save some money in the long run.

3. Prepare a large payment

A large deposit can save you a lot of money. Save for the largest down payment you can afford so you can take advantage of larger loans, lower interest rates and more attractive settlement fees. It can also help lenders determine the loan-to-value ratio of your property. Most loan programs usually require a down payment of between 5% and 20%. In some cases, if you cannot afford a 20% down payment, your lender may require you to pay for mortgage insurance because they borrow more from you. More money will increase their risk of loss.

How to handle debt for quick relief

1.Face debt and solve it.

The courage to face debt can solve the debt. Many people are in debt because of failed investment, short-term unemployment without income, gambling, and so on. You need to calm down and deal with it. Anything rushed will not be achieved. First, distinguish and count your debt. Today’s personal debt can basically be these: credit cards, bank loans, financial institution loans, online consumer loans, private loans. We must first understand the seriousness of various loans, then calmly choose the method of repayment.

Make a clear analysis of the reasons for the debt buildup, and promptly correct your own wrong practices. “Loans to repay are no less harmful than drugs”. Generally, more people cause debt buildups than three types of people: “over-consumption crowds”, “business investment crowds”, and “gambling crowds” Those three categories of people corrected their wrong practices in a timely manner. How to solve your own wrong practices is probably more clear to you than mine. Remember that rush is not enough, you have to deal with debt calmly.

2.How to deal with debts reasonably.

Debts are paid off, but the proper handling of debt is especially critical. Improper handling led to the end of the abyss. Count all debts in priority, and process them according to the importance and priority of the above. I personally included three stages, and everyone dealt with them reasonably.

All debts are self-counted, how much is repaid each month, how to plan personal repayments, and how much fixed income each month. The list of items is naturally clear. First, calculate the monthly fixed income, excluding the monthly household or living expenses, whether it can achieve the same income or repayment amount or a monthly balance.

1). Keep calm first, of course, make all preparations, and actively face debt.

2). Inform family members and relatives and friends in time to sell all the property around them to pay off, after all, if dragged to court for prosecution, the property in your name will still be enforced. If the family has the ability or assets to help you, then accept these in time, of course, if the family is willing to help you. If you don’t like it, don’t do it. After all, it affects the life or way of life of the loved ones around you.

3). Actively handle credit card repayments. Of course, even the minimum repayment is not enough, then negotiate with the bank to explain your situation, negotiate to pay back in 5 years, and agree on the amount within your ability. If the amount is too large, this part will be maintained. No, then keep the repayment every month, the amount is no longer important. Delay in clearing credit cards. Remember to pay off the credit card first, other loans can be placed on behind. If the other party calls or negotiates, it’s best to directly explain the situation, delay the repayment cycle, indicate self-payment willingness, and cannot be repaid in the short term. The blacklist and is not important to you. Your first goal is to ensure that you can continue to make money and repay.

4). Re-plan your life, change your lifestyle, maintain your income, increase your income, and reduce your expenses. Priority is given to ensuring survival, and of course to eliminate unnecessary expenditures. Reasonable distribution of income and repayment amount, after all, survival is the first priority. All lenders want nothing more than you owe debts, so try to pay off debts in the first condition of maintaining your own life.

Should you consider mortgage refinancing when the rates go down?

Regardless of which institution you apply for a loan from, the lender must look at your credit report and personal income and wealth. If the credit report is not good, you can choose a mortgage to apply for a loan, which will be easier than other forms. Generally, if you want to immediately apply for a mortgage loan from a bank, it is easier to complete the assessment of a house mortgage loan. So how can apply for a mortgage loan?

If the bank’s assessment is more thorough, in general, under the condition of real estate as a guarantee, the lending institution will appropriately lower the threshold for loans, but if the borrower applies for this loan at the bank, even if the real estate is used as collateral, it may be rejected. Therefore, it’s suggested that borrowers with bad credit records should seek non-bank financial institutions (such as loan companies, pawnshops, guarantee companies, etc.) to apply for loans in order to ensure smooth loans.

1. Loan companies

Compared with bank loans, the loan company’s requirements for borrowers are slightly lower. If the borrower has a credit overdue no more than 3 times or the overdue has not reached 90 days, the house will be mortgaged, and all the formalities are guaranteed. Or more likely to obtain loans through loan companies. If the loan company has different loan product requirements for the borrower, the borrower will need to “shop around” to find the one that works best with itself.

2. Pawnshop loans

If you have real estate in your name, finding a pawnshop loan is the best option when you need money. According to the detailed understanding of many parties, for a pawn bank loan, as long as the borrower has collateral and the collateral meets the loan requirements, the pawn bank can neglect the requirements for working years and salary conditions, and under the condition of complete procedures, the borrower’s day Get a loan.

3. Find a guarantee company

In the case of real estate collateral, the borrower can also find a formal guarantee company to participate. Generally, under the condition of a secured company, if the personal credit is defective, the loan can be smoothly obtained. The involvement of the guarantee company reduces the bank’s loan risk.

Non-bank financial institutions not only have low thresholds for loans, but also have fast loan rates. As long as the borrower has the necessary procedures, they can make loans on the same day. If the real estate as a mortgage must have a real estate certificate and a state-owned land use certificate, the age of the house must not exceed 20 years, and it can be listed for the business. The real estate mortgage loan amount can be up to 70% of the real estate evaluation value, and the longest loan term can be up to 10 years, which can effectively reduce the financial pressure on the borrower.

How to save up for your mortgage deposit

Although a longer mortgage period (such as 30 years) can lower the monthly repayment amount, it also means that the lender has to pay more interest. By paying off the principal and refinancing in advance, lenders can pay off their mortgage earlier.

The most common form of payment for a mortgage is the Amortization Schedule. The lender pays a fixed amount each month, but the monthly interest rate to principal ratio changes constantly. At first, most monthly fees were paid for interest. As the percentage of interest decreased, the proportion of principal gradually increased. → The monthly fee does not change. The sooner the principal is paid, the less interest will be paid in the future, and it will help to pay off early.
If the current interest rate is lower, or if the buyer intends to shorten the repayment period, you can also use Refinance to re-loan to reduce the interest rate and also save interest expenses. And if you used a floating rate loan (ARM) when you borrowed, you can change to a fixed-rate loan (FRM) through Refinance. For example, when the economy is in a downturn, the floating market interest rate is high. At this time, if you start a fixed interest rate (usually between 4%-5%) through Refinance, you can save a lot of interest money.

How much can Refinance save?

How can I reduce the costs associated with applying for a loan?

This part of the change is greater, depending on the amount of the loan, the loan method and the various lending institutions vary. If you want to save some money here, shop around will definitely not suffer. Because the best Refinance companies vary from state to state, tools have been developed online to recommend the best comprehensive Refinance lenders for homeowners in each state.

Costs related to loan processing
Loan Origination Fee: about 1% of loan amount

Discount: One point is 1% of the loan amount, and one point reduces the interest rate by 0.25%

Appraisal Fee: Approx. $ 200- $ 500 depending on house price

Credit Report Fee: about $ 20- $ 50

Processing Fee: about $ 200- $ 500

Tax Service Fee: about $ 50- $ 100

Flood Certificate Fee: Approximately $ 10- $ 20

Underwriting Fee: about $ 200- $ 500

Document Preparation Fee: about 200- $ 500

Mortgage Insurance Fee: mainly occurs when the buyer’s down payment is less than 20%

What type of insurance should you get when you have a mortgage?

The terms of home insurance are divided into “Named-Peril” (specified danger) and “Open-Peril” (not designated danger). Named-peril insurance only covers the conditions specified in the contract; open-peril does the reverse, covering everything except the exclusions specifically listed in the contract. The Open-peril clause is more beneficial to the policyholder, but the price will also be more expensive. Sometimes it may be more economical to choose named-peril and add an additional endorsement to a specific situation.

According to different claims, housing insurance is mainly divided into the following 8 types:

HO-1: The most basic home insurance, named-peril only pays for fire or smoking, explosions, lightning, hail and storms, theft, malicious damage, vehicle damage, aircraft damage, riots and civil unrest, volcanoes The loss of housing and construction caused by 10 situations, such as the outbreak, may also bring some personal property claims, but does not include liability insurance.

HO-2: Basic housing insurance, in addition to covering HO-1’s claims coverage; it also increases the weight of ice, snow or sleet due to object fall, freezing of housing systems such as heating and heating, and sudden changes in other household systems such as houses and plumbing Tearing, cracking or swelling, sudden overflow of water or steam, and sudden and accidental damage caused by artificially generated currents, caused by 6 additional circumstances, such as house construction loss and listed types of personal property loss; include liability insurance.

HO-3: In addition to the coverage of HO-2 insurance, the most common house insurance is open-peril, which means it can be reimbursed except for the cases listed specifically.
HOB: It is almost the same as HO-3. Both are settled as open-peril in terms of housing construction, but they are settled as named-peril in terms of personal property. The difference between the two is that HOB has a slightly wider range of water claims than HO-3. Larger, and will also include some “attachment” claims at home such as boats, lawnmowers, tractors, etc.

HO-4: This type is also commonly known as “Renters Insurance” (rental insurance/tenant insurance), which only covers personal property loss and liability insurance within the scope of HO-2, excluding housing construction.

HO-5: This can be regarded as the widest range of housing insurance. On the basis of HO-3, both housing construction and personal property are open-peril, except for those specifically listed. At the same time, this type of housing Insurance prices will also be higher.

HO-6: The sixth category is commonly known as “Condo Insurance” (Condo Insurance / Apartment Insurance). This type of insurance includes personal property and liability insurance, as well as insurance for building structures such as walls, floors, and ceilings within the apartment; as for The insurance of the public part of the apartment is usually the responsibility of the homeowners’ association, the HOA.

HO-7: The seventh category is commonly known as “Mobile Home Insurance” (mobile home insurance). The coverage of this insurance is similar to HO-3, but the details are specifically designed for mobile homes.

HO-8: The eighth type of insurance clause is designed for old houses. The clause is similar to HO-3, but the construction payment is capped with the actual cash value. Historical buildings and registered landmarks usually use this insurance.

Is it a good idea to pay off your mortgage early?

It is not a good idea to pay off your mortgage in advance. Because it involves the problem of bank default collection. But even if you have to pay liquidated damages, there are still many options to pay off the loan in advance.

First of all, the equal principal is not necessarily good. Because the principal of the monthly repayment remains unchanged after the equal principal is repaid. Causing the monthly repayment amount to decrease, the repayment period to be extended, and the interest to be increased. Therefore, if you intend to repay in advance, you should calculate which loan method is more suitable based on the amount of prepayment.
Pay off mortgage is a science, which is sloppy. There are two aspects here: one is to choose a good loan repayment method; the other is to choose a good loan repayment method in advance.

What are the benefits of pay mortage early?

Paying mortage early will bring you a good credit history. You can pay less interest on the bank’s loan after repayment is completed. Generally speaking, after the borrower has a certain financial ability, early repayment also has certain benefits, as follows:

1. If the borrower does not currently have much funds to fully pay off the loan, he can also choose to pay off part of the loan, which can also reduce the pressure on future monthly payments or accumulate funds to a certain amount for investment, etc. It is also a good choice.

2. In the case of real estate mortgage loans, if the lender pays off the mortgage in advance, the real estate certificate can be retrieved. If there is a need for funds in the future, the real estate mortgage loan can also be used to obtain capital turnover, and can also enjoy more Low loan interest rates. It is not good to repay the loan in advance, as long as it is suitable for everyone’s actual situation and is good for everyone, it is the right choice. As a reminder, different banks have different requirement

Is an early mortgage payoff in your best interest?

Nowadays, although real estate necessary for people, the unstable market of real estate still makes most people worry, especially the issue of the mortgage. Should the mortgage be repaid in advance, and what are the benefits in advance? However, some people will choose to repay the mortgage in advance, and some people will repay the mortgage on the deadline for repayment of the mortgage. So, does the time of repayment of the mortgage have any effect on the borrower?

1. We must consider the current mortgage interest rate.

Generally speaking, the mortgage interest rate is not fixed and will be adjusted according to the prevailing interest rate level. In recent years, due to repeated interest rate cuts, the basic interest rate on housing loans has dropped significantly. For example, some fund loans take into account that the current provident fund loan interest rate of more than five years is 3.25%, the commercial loan benchmark interest rate is 4.9%, plus discounts, interest rates can reach very low levels. From a trade-off perspective, if there is more money, it is more cost-effective to cover the cost of housing loans through multiple investment channels.

2. It is necessary to consider what the repayment method is adopted.

At present, there are two most common repayment methods, namely equal principal & interest, and equal principal. It should be noted that before deciding whether to repay the mortgage in advance, it also depends on whether there is an agreement in the loan contract to pay liquidated damages. Why are banks not welcoming early repayments?

3. Commercial interests may be relatively unwelcome.

As a commercial property, housing loans take interest as the profit point. Banks also provide housing loan funds for personal home purchase business to obtain interest from them. However, the loan period chosen by ordinary home buyers when purchasing real estate is determined by individuals. Based on the selection of loan term, for different interest rates, the following figure (the loan interest rate performed on 2015-10-24): the interest rate within six months (including six months) is 4.35%; from six months to one year (including One year) 4.35%; the interest rate for a three-year period (including three years) is 4.75%; the interest rate for three to five years (inclusive) is 4.75%; the interest rate for more than five years is 4.9%.

The longer the loan period chosen by the house buyer, the more interest the bank collects, and the prepayment can be based on the agreement in the loan contract. “__ months later”, you can propose to repay part or all of the loan in advance for the first time; whichever comes first!

Advantages and Disadvantages of Paying off Mortgage Earlier

Whether you should pay off your home mortgage in advance or continue investing? It is a difficult choice. Although doing some mathematical calculations can help you make a decision, it actually goes a long way in helping you make the right decision. Psychologically speaking, your own urgent needs, risk tolerance, real estate market conditions, and taxes all play a vital role in making the right decision.

Making extra payments to your loan can help you save a lot of interest. The homeowner who pays the additional loan is paid a return equal to the mortgage interest rate minus the tax credit. Based on today’s money market accounts, savings accounts, deposits, etc., paying interest rates of less than 1%, paying off your mortgage in advance will bring you an annual rate of return of 3% to 6%, which of course depends on your mortgage Lending rates.

Advantages of paying off your mortgage early

• No need to pay interest on loans again and get a guaranteed return on investment equivalent to interest minus all tax deductions.
• Own your own house completely.
• You no longer need to pay interest and huge principals, making your finances more flexible and saving money.
• You own a home that avoids inflation.
• In addition to property taxes, your family is not responsible for other housing costs.

If you don’t consider the life cycle of a mortgage loan, paying off the loan does have a lot of benefits. Paying extra interest and principal on your home loan will greatly reduce the time it takes to pay your principal. Paying your principal extra is always a wise choice.

Disadvantages of paying off your mortgage early

In some cases, there are many benefits to paying off your mortgage in advance. But for some individuals and families, they should use cash flow or excess funds for other investment opportunities, such as retirement funds, education savings, car loans, credit cards, etc. Hiring a qualified financial officer to provide you with the necessary consultation will be very beneficial to you.

• Pay more personal income tax: You lose your right to use your mortgage interest to deduct personal income tax.
• Trapped property rights: Although you paid off your mortgage, you have no chance of making a profit other than selling your house.
• Although you paid off your home loan, your home appreciation will be equal.
• Lost potential investment opportunities

When considering whether to pay off your loan early, you should check your financial situation and your short- and long-term goals.

Should you use a mortgage broker?

You found a perfect new house or apartment to maintain yourself and now you need a mortgage to buy it. But how did this process begin, can you be sure you did it right? Should you use a mortgage broker to get a home loan or go straight to the bank? What exactly are mortgage brokers? How are they different from bank loan officers or financial advisers? Here are some answers to important questions and reasons for using or not using a mortgage broker.

What does a mortgage broker do?

A mortgage broker is essentially an intermediary between you and a potential lender who will issue your home loan. Your broker can compile a set of mortgage options from multiple banks on your behalf and offer you the best available terms and interest rates based on your specific needs. On the other hand, the bank will design and provide a single rate based on your situation. The bank may offer the lowest rate, but you can do additional research yourself and compare it with other options.

Your mortgage broker will take other actions on your behalf, such as verifying your income and employment. They will use all the information and documents you get to apply for loans from multiple lenders while working hard to find a new mortgage that works best for you. For banks, if you have deposited in that particular institution, they may have archived all your financial information, which will expedite the qualification process.

Once your mortgage broker has found the best lender for you and your new home, they will contact the bank’s underwriting department, the property company and your real estate agent to handle all the details before and after the deadline. Sounds like a piece of cake, right?

How do mortgage brokers get paid?

Like most professionals in this industry, mortgage brokers also get paid in the form of commissions. This is usually based on a percentage of the total loan. Commissions are usually paid by the borrower at checkout.

What is the benefit?

We already mentioned what mortgage brokers do and how they get paid, but what are they the real advantage of using one? Often, mortgage brokers compare the mortgage rates of a large number of banks and lenders immediately, so you usually get more options for loans that work with mortgage brokers. Sometimes, a mortgage broker may be the only option for someone who has difficulty loaning or qualifying.

What’s the trap?

While hiring a mortgage broker may be easy, there are some pitfalls to keep in mind. Due to the way mortgage brokers get compensated, you always have the possibility of being overcharged through them instead of going directly to the bank. Working directly with a bank rather than with a mortgage broker can also give you a more attractive low interest rate loan.

So when you’re ready to buy the perfect new home, apartment or condominium, be sure to consider your choice to work directly with a bank to get a home loan or work with a mortgage broker to develop a more targeted approach. Either way, make sure you do your task, keep your finances organized, and understand your options.