Will it get harder for a regular home buyer to get a mortgage or Mortgage Refinance in the year 2014? Probably yes, however this shouldn’t keep you away from applying for your home loan. Even while the rules have been made stricter and the options have been limited, you still stand a good chance in getting your home loan. The fact is that the statistics tell that more than one third of all home buyers who think they can’t get a loan actually do qualify. You’ll increase your chances in getting a better mortgage if you utilize the given tips.
Get ready to meet all fresh requirements.
The chief new requirement for mortgage candidates is that they’ve to have debt-to-income ratio less than 43%, which means that the final amount of your monthly payments including your credit cards, unsecured loans, insurance policies and taxes must not go above 43% of your gross revenue. If you would like to qualify for a home loan, you must limit your current spending’s and look to pay off or pay down as much of your bills as possible. The quicker you take action the better, because interest rates are likely to go up slightly in this year. A great place to start is online, at companies like www.iWantaBetterMortgage.Com. Websites like these can help narrow the search and save time and money.
Currently, the lowest credit score needed for receiving a home mortgage loan is 680 and is not likely to change during 2014. Still, taking into account that all other requirements are stricter, interest rates are rising, a lower credit score will help in getting the better mortgage rate desired. That’s why you must aim and getting a credit score of 720, at a minimum.
Mortgage lenders may require extra documents in order to verify your savings and credit history. You’ll have to give W-2’s, investment accounts statements and tax returns for the last 2 years. You must verify the origin of each larger deposit additionally. Taking this into account, you must begin preparing your documents as early as you can.
Stay away risky loans.
As mortgage interest rates increase this year, the trend is likely to continue in the upcoming years while the general conscious inside the mortgage industry is that the markets continue to go higher. Due to these major reasons, you must avoid getting risky loans such as an ARM. You’ll profit from sealing in an interest rate while it’s still less. That’s why fixed-rate loans as well as their hybrid counterparts are highly suggested. These fees and extra costs are also prevalent in home equity loans as well.
Examine all mortgage costs and fees.
It’s common for home buyers to disregard the final costs of the mortgage loan. Other hidden charges could cost a buyer plenty of money each year. Key to a few of these costs are, items like the mortgage insurance surcharge specific to government backed loans that are likely to grow considerably. Also, the home buyers who’re using these loans would have to pay for premiums through the whole period of their loan which will push their costs further up.
Overall, you must definitely depend on negotiations if you want to secure a mortgage in the year 2014