Do you know all the steps involved in applying for a house? The process begins long before you even find the property itself. The mortgage application process can seem daunting and confusing, but the more you prepare, the smoother your experience will be.
Here are the major parts of the process to know:
Mortgage loans have basic minimum requirements for you to qualify. Most of these criteria are financial factors, but things like property type also come into account. Some metrics a mortgage lender will consider before giving you a loan estimate are your debt to income ratio, credit score, income and assets.
Many first-time homebuyers are unaware they have room to negotiate loan estimates. Lenders can be flexible about their rates and fees offered.
You can shop around and compare prices with other customers. In some cases, you may use it as a bargaining tool in order for a lender to lower your rates. Checking multiple mortgage rates helps you understand how much money you really qualify for.
Lenders examine your finances - bank statements, taxable return, salary stubs, credit and credit history - and determine the cost for a new home purchase. By obtaining a preapproval letter from a lender before making an offer or even beginning your home search, you can be certain you’ll have the financing you need.
Also, you’ll have a better idea of how much house you can afford, and a better chance your eventual offer is accepted by the seller.
Avoid taking on new debts
Mortgage underwriters will evaluate your credit report based on monthly payments of your debt and total income. If you have too many credit cards in one month to repay your loan, your credit score can take a hit - and the lender will notice. To avoid this situation, don’t apply for any credit cards, credit lines or loans while applying for a mortgage.
Lenders do not consider your lifestyle or your personal expenses when you apply for a loan, so be sure you include additional housekeeping costs into your financial plan. Interest rate and down payment amount are both major factors in determining the amount of your mortgage payments, but don’t forget to factor your other costs into a budget.
When you apply for a mortgage, you’ll likely be taking on the biggest financial debt of your life. It’s no small undertaking, but it is possible to choose the best loan for you. Keep these basics in mind to keep your process as simple as possible.
Susan Shuxian Hu has been a dedicated realtor serving in Silicon Valley since 2010. With great passion, outstanding negotiation skills and due diligence, she has helped many buyers and sellers in their real estate needs. Living in West San Jose for more than 14 years, she has broad knowledge in Cupertino, West San Jose, Los Altos and Saratoga. She has enormous patience working with buyers and never tired of showing all possible properties that may fit client’s needs. Clients appreciate her best service to their satisfaction. She specialized in luxurious real estate purchase in Los Altos, Cupertino, Saratoga and Palo Alto. She also helped friend and past client’s referral working in San Francisco, Foster City and far reached Bay Area.
Susan Shuxian Hu was graduated in East China Normal University in Shanghai with bachelor and master degrees in Bio science. She came to US in 1989 and earned her Ph.D. in Molecular Genetics in Texas A&M University in 1996. After one year of postdoc in Southern Florida University in Tampa, she moved back to Orlando with her family and started working in Lucent Technologies. In 2002, Susan moved to California, Silicon Valley joined a start-up company. Since then she worked in high tech Corporation till 2009. Driven by her dream job pursuing, she found her passion working in sales by helping people in real estate after one year of education in De Anza business and real estate law study. Since then, she has been serving many people in Bay Area for their real estate needs.
With bilingual advantage, she has been actively working with Chinese immigrants as well as local engineers and residents. With rich high tech background and connection with Chinese community, Susan has served in luxurious real estate in last a couple of years.