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Helpful Advice on Getting a Home Loan

Hunting for the house of your dreams can be exhilarating. Unfortunately, hunting for the home loan of your dream is not nearly as exciting. The following advice can help you avoid problems.

1. The time to address your credit report is when you first start thinking about buying a home. Don’t wait until the process is underway. If you need to fix something on your report, it can take a couple of months.

2. Would you buy a car from the first ad you saw? Of course, not. Mortgages work the same way. Every lender offers different terms, so don’t just go with the first one you find.

3. Some adjustable rate mortgages tie their interest rates to the COFI index. COFI stands for 11th District Cost of Funds Index. It is a monetary correlation of money transactions for banks in California, Arizona and Nevada.

4. If you intend to buy a home in the next six months, you need to do mortgage planning. Get a copy of your credit report and make sure it is accurate. Start paying down debt so your debt to income ratio is good.

5. If you pay points on your mortgage, try not to wrap it into the mortgage. If you write a separate check from your personal account, you can deduct the full points on your taxes.

6. If you pay points for a loan on a second home, you cannot deduct them from your taxes all at once. You must deduct them over the life of the loan.

7. When you apply for a mortgage, your credit score is a key factor. A FICO score of 740 or above is considered great credit, 700 to 739 is good, 680 to 699 is okay and anything below is bad.

8. Lenders make money on adjustable mortgages via the margin. The margin is the difference between the interest rate they are charging you and the index the loan is based upon. The margin is usually 2 to 5 percent.

9. When applying for a mortgage, you will be surprised at how many fees lenders hit you with. To check your credit, you will often be charged a credit report fee. It should be no more than $50.

10. To get an accurate account of your closing costs, make sure to ask for a HUD-1 form. It has to set out all closing costs.

Applying for a mortgage can be a bit intimidating. You financial soul is stripped bare. That being said, don’t get to stressed. Millions of borrowers are approved and you probably are more qualified than many of them.

Article Source: http://articlebob.com

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