Your credit score is one of the first things a lender will check to see if you qualify for a loan. It’s a good idea to review your credit report and score yourself before applying for a mortgage. If you have a low score, you will need time to raise it. Most Lenders use your FICO score. To qualify for the lowest interest rates available, you usually need a FICO score of 760 or higher.
Refinancing your mortgage allows you to pay off your existing mortgage and take out a new mortgage on new terms. You may want to refinance your mortgage to take advantage of lower interest rates, to change your type of mortgage, or for other reasons.
These resources will help you learn more about refinancing your mortgage:
Most mortgage professionals are trustworthy and provide a valuable service, helping you to buy or refinance your home. But dishonest or “predatory” lenders do exist and engage in practices that can put you at risk of losing your home to foreclosure. Learn how to protect yourself from and report predatory lending and loan fraud.
Learn how to file a complaint about mortgages and lenders, and who to send your complaint to.
Learn about the types of scams that predatory lenders use to trick you. The Department of Housing and Urban Development (HUD) has counselors available across the country to help you navigate mortgage professionals, look out for scams, and choose the right loan type for you.
Predatory lenders may try to:
A reverse mortgage is a home loan that you do not have to pay back for as long as you live in your home. You only repay the loan when you die, sell your home, or permanently move away.
Homeowners who are at least 62 years old are eligible. These mortgages allow older homeowners to convert part of the equity in their homes into cash without having to sell their homes or take on additional monthly bills.
Read more information about reverse mortgages.
Types of reverse mortgages
Be sure to watch for aggressive lending practices, advertisements that refer to the loan as “free money,” or those that fail to disclose fees or terms of the loan. To be a savvy consumer and help protect yourself, remember:
If you suspect fraud or abuse, let the counselor, lender, or loan servicer know. You may also file a complaint:
If you’re a homebuyer, the Department of Housing and Urban Development (HUD) has two programs that may help make the process more affordable.
The Federal Housing Administration (FHA) manages the FHA loans program. This may be a good mortgage choice if you’re a first-time buyer because the requirements are not as strict as other loans.
Determine your down payment, closing costs and credit score before applying:
Many condos do not have FHA approvable. Also, make sure the price of the home is within the loan limit for an FHA home in its location.
The FHA doesn’t lend money to people. It insures mortgage loans from FHA-approved lenders against default. To apply for an FHA-insured loan, you will need to use an FHA-approved lender.
When homeowners default on their FHA loan, HUD takes ownership of the property, because HUD oversees the FHA loan program. These properties are called either HUD homes or HUD real estate owned (REO) property.
Your qualifications to buy a HUD home depend on your credit score, ability to get a mortgage, and the amount of your cash down payment. You can also use an FHA-insured mortgage to buy a HUD home.
Use the HUD Homestore to find listings of HUD real estate owned (REO) properties for sale. Click on the agent tab to find contact information to learn more about the property.
If you have a question or need more information about FHA loans or HUD homes, you can contact the Martin Group or your preferred mortgage broker.
A mortgage is a loan from a commercial bank, mortgage company, or other financial institution to purchase a home or other real estate. A lender will give a loan if you meet certain requirements such as a high enough credit score and income level and have the financial ability to pay it back. The lender can take, or foreclose on, the property you’ve mortgaged if you don’t repay the money borrowed, plus interest.
Getting a mortgage is one of the biggest financial decisions you may make in your life. This overview can help you understand the process.
Before you begin searching for homes, you’ll need to take a look at your income and credit score to figure out if you can afford a home and the monthly mortgage payments. You might want to check out the Mortgage Calculator to see what a monthly payment might be.
You can choose from different loan options depending on the amount of your down payment, your personal preferences, and if you qualify for special loan programs. Get information about the length of the loan (typically 15- or 30-year), interest rate (fixed or adjustable rate) and loan program types (conventional, FHA or VA).
After doing your homework about loans options, start looking for a potential lender. As you consider different lenders for your mortgage, ask questions about the interest rate for each option. These rates can fluctuate week to week. Learn about the effect of interest rates on your monthly payment.
At this point, you can get a pre-approval or pre-qualification letter from a lender. As a future home buyer, this letter shows you’re a good candidate for getting a mortgage. It’s based on your preliminary documents and credit score and shows how much they’re willing to lend you.
When you’ve found a home and made an offer that has been accepted by the seller, it’s time to get loan estimates from multiple lenders. A loan estimate is a three-page document that outlines the loan terms the lender expects to offer you for a mortgage.
You’re now in the closing phase of home buying. You will need to get the home inspected and look for homeowners insurance. After the inspection, your lender will order a home appraisal to make sure the property is worth the amount you’re borrowing. Your lender will also set a date for the closing meeting.
Once the mortgage is approved, you’ll get a loan closing document from the lender, detailing all the final costs. Finally, you’ll go to the closing meeting to sign the last of the paperwork and get the keys to your new home.
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