Tips on Mortgage Origination
Applying for a mortgage loan for the first time can be a challenging experience. You are going to need to sign a mountain’s worth of paperwork, answer personal questions about your work experience and financing and come up with large chunks of money. But by understanding some basic tips about the mortgage origination process, you can remove at least some of the stress from applying for a mortgage loan.
Check Your Credit Score First
Mortgage lenders now rely heavily upon your three-digit credit rating when deciding if they’ll lend you money and at what interest rate. Those lenders change, most of them will book their lowest interest rates for borrowers that have credit scores of 750 or greater. Borrowers with credit scores lower than 620 will not qualify for a mortgage loan from several conventional lenders. Before applying for a mortgage loan, check your own credit rating (see Resources). As a result, you will know what kind of interest rates to expect from the creditors you telephone. You can get your credit scores from the three nationwide credit reporting agencies that maintain these numbers. These scores aren’t free, though. You’ll normally need to pay about $15 for them.
Eliminate Credit Report Errors
Your credit ratings stem directly from the credit reports which the credit reporting agencies maintain on you. These reports chart how often you pay your bills late, if you’ve filed for insolvency or lost a home to foreclosure, how much credit card debt you’ve got and how many poor credit cards you hold. You can order one free copy of all your three reports every 12 weeks (see Resources). Once you receive your free credit reports, you can study them for any mistakes. If you find any–possibly 1 report lists two open credit card accounts which you canceled three decades ago; perhaps the next lists a missed automobile payment you know you paid punctually –notify the credit bureau that made the error in writing. By removing errors from your credit file, you can boost your credit rating, making you a more attractive borrower to mortgage lenders.
Call Many Lenders
You must shop around for the ideal mortgage lender when applying for a mortgage loan. Lenders change in the rates of interest and closing costs they bill. Bear in mind, also, you don’t need to operate with mortgage lenders based only in the San Francisco region. You can work with any lender that’s licensed to work in the area, regardless of where it is located.
Prepare your Paperwork
Lenders will need you to provide copies of certain papers to show your earnings and employment status. To speed up the mortgage-origination procedure, create copies of your bank savings and checking accounts statements, last two paychecks, latest federal income tax return and IRA or other retirement accounts statements.