How to Find a Mortgage
When you begin to investigate how to find a mortgage there are several steps that you should take in order to assure that you are getting the best possible mortgage terms available to you.
The first step is to evaluate your financial standing. It is the first thing that any lender will do before you can qualify for a loan so before you worry about how to find a mortgage you should know what it is that you qualify for. Order copies of your credit reports from each of the three major credit bureaus with your credit scores so you know exactly what your credit rating is. Once you have received them review them carefully and resolve any outstanding negative credit issues before you apply for a mortgage.
Second you should do a thorough pre-qualification of yourself to know exactly what you qualify for before you apply for a loan. The lender that you choose will do this also, so it is in your best interest to know what you qualify for comfortably. No more than 26% to 28% of your gross income should be used for your housing payment and no more than 36% to 38% on all recurring debt. When the bank qualifies you they will use debt showing on your credit report as the total amount of your recurring debt. Many times there are items that are paid for regularly that don’t appear on your credit reports. When you are pre-qualifying yourself, you should include all of your debt and your true income to ensure that you do not get in over your head by borrowing more than you can afford.
The third step is to become familiar with the standard mortgage application and the paperwork involved. A mortgage is single largest loan most of us will take in a lifetime so you should understand the process well before you sit down at the table with a potential lender. You will need to provide any mortgage company with a two year history of your employment and residence as well as a three month history of your financial accounts to verify available funds for down payments and closing costs. Keep files in order to keep the most up to date paperwork at your fingertips at all times during the loan process. From time to time during the loan process you may be asked to provide updated documentation so you should keep it close by.
Once you have completed the first three steps, the fourth and final step is simply to shop lenders. In step one you evaluated and cleaned up your credit and step two you figured out precisely what you can afford each month. Step three got you comfortable with the loan process and the documentation involved. Once you know exactly where you stand financially you will be in a position of power in negotiating a loan with the best possible terms. This is all there is to step four. Take your time in choosing a lender. The better your credit rating the better loan you will qualify for.
When it comes to how to find a mortgage, making sure you take the extra time in the beginning to follow the appropriate steps can save you tens of thousands of dollars over the life of your loan.
