Finding the right home for you is your primary goal, but enjoying it with a low payment and better mortgage terms is a very important secondary goal. Everyone’s financial picture is different; whether you earn regular wages, are self-employed, or have less-than-ideal credit scores, I’ve researched and worked with many mortgage brokers and lenders in the Triangle area, and I’ll help you to contact those that are the best fit for you. Let’s take a look at how some of these circumstances can affect you and the terms you may be offered.
Just because there’s nothing special about your income stream, and you’re getting a paycheck every week, doesn’t mean there won’t be differences between mortgages and lenders for your needs. Every mortgage broker and lender tend to work within their own requirements and procedures, and these may or may not be the friendliest terms for a salaried or hourly wage earner. I will guide you towards the ones that will treat you right and give you the best terms.
Since the mortgage and housing crisis that began in 2007, it’s become a grueling process for a business owner or self-employed person to get a mortgage. Documentation of income and expenses has become much more detailed, and I’m up-to-date on all of it. I’ll steer you toward multiple sources for great mortgages for the self-employed.
All types of lenders have become tougher in our new financial environment, and it’s easy to get a ding or two on your credit these days. It doesn’t even take a mistake or late payment, as credit scores are reduced for the amount and ratio of debt, as well as types of debt. Millions of people pay their bills on time and still don’t have those high end credit scores. I know which lenders are ready to provide good mortgages for less than ideal credit scores, and I’ll tell you who they are.
Though most residential home buyers are buying a home they intend to occupy for a number of years, on average eight, this isn’t always the case. Investors may be looking at a shorter ownership time frame. ARM’s, Adjustable Rate Mortgages, may be appropriate if the plan is to own the home less than seven years, particularly less than five. Because the lender is tying up their money for a shorter defined time period, they loan it at lower interest rates. ARM’s can result in hundreds of dollars a month in lower payments in some cases. They can also allow a buyer to qualify for a larger home. However, this isn’t generally a great practice, as once the ARM’s fixed rate interest period is over, rates can escalate more than expected.
Especially after the mortgage and housing problems that began in 2007, lenders and their underwriters are scrutinizing financial, income and expense details much more closely than ever before. Be prepared to dig out a lot of documentation, and it’s best to be forthcoming with any financial information that impacts your ability to pay the mortgage payment. Even if it’s not asked for early in the process, be prepared for questions and requests for documents throughout the process. Also, it’s highly recommended that you not add any credit card or make large purchases between the purchase contract and the closing. Just before closing, most lenders will do another credit check and a check for any liens or encumbrances.
There are a number of fees associated with getting a mortgage, and the total of origination and other fees is usually the highest closing cost aggregate item in the deal. Never hesitate to ask about all fees, why they’re charged and why they’re a certain amount and how they’re calculated. It’s your money, and you’re the customer.