If you are looking for a Mortgage Advisor to help you through the
financing process, please give us a call at (520) 744-2292 or email Sue
Licensed Mortgage Professional #206048
Fairway Independent Mortgage Corp.
5401 N. Oracle Rd., #101
Tucson, AZ 85704
Getting a mortgage loan has become a difficult task lately, and don't expect that to change anytime soon.
Lending standards will remain stringent in 2012, but that doesn't necessarily mean you won't be able to get a mortgage with an excellent rate. Knowledgeable borrowers who understand the rules and prepare in advance will improve their chances of getting a mortgage.
Here are 12 tips to help you stay on top of your game as you try to secure a mortgage in 2012. First things first though, if you’re looking for an awesome lender to help you buy a home in Tucson, visit our friend Sue Pullen!
#1 Study your credit Good
credit is the key to attaining a mortgage in this strict lending
environment. First, you need to get copies of your credit scores and
credit history from the three main credit reporting bureaus. Then, study
the reports closely to make sure there are no errors or issues to
resolve before applying for a mortgage loan.
lenders require a minimum credit score of 680 to conform to Fannie Mae
and Freddie Mac's guidelines. Federal Housing Administration loans,
which are guaranteed by the FHA, allow for lower scores, but most
lenders are likely to stay away from scores lower than 620.
#2 Prepare before you start There
are a few simple documents every lender will ask for when you apply for
a mortgage. Don't wait for them to ask, have them ready in advance.
these documents with you when you walk into the lender's office: your
last two pay stubs, W-2s, income tax returns and bank statements.
in and save these documents and any additional ones the lender requests
on the computer so you can easily resend them if anything gets lost
during the process.
#3 Know how much you can afford Be
sure not to rely on your lender to tell you how much of a mortgage you
qualify for and then borrow the maximum amount. As you plan your budget,
make sure to leave room for unexpected expenses. This is especially
important when you are buying a house.
mortgage calculator on our See Tucson Real Estate website can help you
determine how much house you can afford and also estimate your monthly
#4 Shop around Shopping
around for a mortgage should go beyond comparing interest rates. While
rates are definitely important, prospective borrowers also need to
consider points, closing costs and different types of loans. Aim to get
estimates from three banks and three mortgage brokers before you decide
which combination works best for you.
#5 Time is of the essence Once
you submit your mortgage application to the lender, the clock starts
ticking. Make sure you send in any documents requested during the
approval process quickly.
A delay in closing the loan could kill
the purchase and cost the buyers their deposits. When refinancing, a
delay could mean losing the interest rate the borrower originally locked
in. After you apply, ask for an expected closing date and check in with
the lender periodically until the loan closes. Remember, some lenders
close more quickly than others.
#6 Mortgage approved? Don’t make any changes to your credit! After
the lender pulls your credit and tells you that you've been approved,
don't assume you're of the hook. Most lenders will check your credit
again before the loan closes.
smart to avoid any transactions that may affect your credit. Don't
apply for new credit cards or credit lines. Pay your bills on time.
Don't close any current accounts. Don't finance a new car. Hold off
#7 Consider a refi with no closing costs When
refinancing, you don't always have to spend money to save money. Many
lenders offer mortgages with little or no closing costs. But be careful,
it's not a free ride. Lenders usually make up for those lost closing
costs by charging the borrower a slightly higher interest rate. But
sometimes the slight increase translates into a just few extra dollars
in the monthly payment, while the borrower saves thousands in closing
#8 Consider a shorter-term loan Since interest rates are close to rock bottom, short-term loans have become more affordable for many borrowers.
who currently have a 30-year mortgage with an interest rate of 6
percent or higher may be able to refinance into a 20-year or 15-year
loan while keeping their monthly mortgage payments close to what they
pay now. Consider this option even when the short-term loan means
slightly higher monthly payments. This is your chance to pay off your
mortgage in less time.
#9 Receive a gift? Be ready to explain it Did
your parents or in-laws give you a few thousand bucks as a gift to help
out with the down payment? If so, lucky you! -- but make sure you can
document and explain from where and why you received the money. FHA
loans allow borrowers to receive their down payment as a gift from a
relative. However, for conventional loans, borrowers may receive gifts,
but at least a 5% of the down payment has to come from the borrowers’
receiving a gift are required to present a gift letter signed by the
donor, and they will also need a paper trail of the money transfer. Be
prepared to present statements to show where the money came from when it
was deposited into your account.
Avoid receiving large cash
gifts in your bank account until your mortgage closes, unless the money
is being used for the down payment. Any large deposits besides your
paycheck will have to be explained in order to comply with federal
#10 Don’t give up! If
one lender denies your mortgage application, don’t worry, that doesn't
mean all lenders will. Most lenders follow Fannie Mae and Freddie Mac
guidelines. In addition, they have their own internal underwriting
guidelines, and some are more stringent than others.
lender exactly why your mortgage was rejected. Depending on the reason,
you may be able to take some simple steps to quickly improve your
credit, or you might just need to try a different lender (like our
#11 Appraisal isn't enough? Try again If
the home appraisal your lender received isn't enough to support the
mortgage loan and you think the appraiser is mistaken, try another
lender. You can't order a second appraisal yourself or pick which
appraiser the lender hires, but you can dispute the first appraisal or
apply with a different lender.
In a perfect world, the appraised
value of a home shouldn't vary drastically from one appraiser to
another, but unfortunately sometimes they do. If you believe the first
appraiser is wrong, try a different lender and hope that lender's
appraiser does a better job.
#12 Seek help If you are behind on your mortgage or are struggling to keep up with your mortgage payments, seek counseling.
U.S. Department of Housing and Urban Development has counseling
services across the country. Homeowners can receive free
foreclosure-prevention counseling from HUD-approved counselors. To find a
housing counseling agency near you call (800) 569-4287 or visit the HUD