These are the main points that I went through when deciding on my lender and when searching for a home. I shopped myself around to different lenders and landed with Wells Fargo first. After getting horrible service with them, Stonegate Mortgage appeared. They treated me fair. My only fault with them is that I had to pay for the appraisal guy to go back out and look at some repairs that was made.
Analyzing your debt to income ratio
This is one of the first things a lender will look at when you're buying a home. The less debt you have the lower your percentage will be. When I purchased my home. My debt to income ratio was 8%. Which is really good. Once you start hitting 25-27% its gets a little flaky. Reason being once you apply your mortgage to that ratio you will be close or over 50%. Most lenders want to keep you under 47%. In my opinion that is still to high. When you get approved, they are approving you for the max percentage. Always find this out. Try to stick to 22-25%. This way you won't be house poor.
Are You Really Pre-Approved for a Mortgage?
Pre-Qualified and Pre-approved are two different things. Know the difference. In face dont even wory about pre-qualified. It doesnt do anything for you. It may get some realtor to talk to you, but thats about it. Always get pre-approved when you find the mortgage company you want to go with. Use the pre-qualified as a way to feel out the mortgage company and how they work.
Do You Have a Mortgage or a Deed of Trust?
security instruments that gives a lender the right to sell your property to recover funds if you do not pay the debt. A mortgage and a deed of trust are both security instruments, but deed of trust allows a lender to take an easier road to foreclosure. As they dont have to go through a judicial process (no court).
Don't Get Caught Up In Loan Fraud
I dont see how anyone can get caught in one. If you are at all educated then you know what companies are reputable. If you dont, then educate yourself. I used Stongate Mortgage.
Facts About ARMs, Adjustable Rate Mortgages
If you dont plant to live in your home for more than a few years, get an arm. You can get a better interest rate in the earlier years. After the period has expired your loan will adjust each year until it reaches the max APR that is agreed apon when your mortgage was made.
Facts About FHA Mortgages
FHA loans allow you to buy a home with as little as 3% down. Unlike a conventional home loan that requires 20%.
RESPA's Required Disclosures Help You Shop for a Mortgage
Disclosures will become your best friend. These will break down all the cost. That way you will not have any surprises. Its there to protect consumers when they buy and sell real estate, and teaches them to be better shoppers. This will also make it easier for you to compare two different mortgage companies since you will see a break down of every fee you have to pay for.
Should You Buy Discount Points?
Unless you plan on living in your home for more than 10 years. Dont waste your time. I could have paid an extra $1000 and gained a point but it would have taken 7 years to before I would start seeing the savings.
Rock on. I just refinanced from 6.25% to 4.875%. I agree with you on not buying points. +Follow
great info here, especially on debt:income ratio.
bookmarking this. :)