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How To Apply For A Home Mortgage

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How To Apply For A Home Loan | Movement Mortgage| Winston Salem, NC

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Determine Your Mortgage Budget

Before ever speaking with a mortgage officer, youll want to determine how much house you can afford and are comfortable paying .

A good rule is that your total housing payment should be no more than 35% of your gross income.

For example, if together you and a co-buyer earn $80,000 a year, your combined maximum housing payment would be $2,333 a month. Thats an absolute, max, however. I recommend sticking with a total housing payment of 25% of gross income. Youll find other readers here who are even more conservative.

It can be difficult to equate this monthly payment to a fixed home price, as your monthly housing payment is subject to variables like mortgage interest rate, property taxes, the cost of home insurance and private mortgage insurance , and any condo or association fees.

Get Your Approval Letter

Once you find the best mortgage solution for your needs, you can see if youre approved online. If you are, well send you a Prequalified Approval Letter that you can use to begin house hunting. If you want an even stronger approval, you may want to consider contacting a Home Loan Expert and applying for a Verified Approval.

Tested. Trusted. Top-rated.

Also Check: Will Mortgage Pre Approval Hurt Credit Score

How Your Mortgage Payments Are Calculated

Mortgage lenders use factors to determine your regular payment amount. When you make a mortgage payment, your money goes toward the interest and principal. The principal is the amount you borrowed from the lender to cover the cost of your home purchase. The interest is the fee you pay the lender for the loan. If you agree to optional mortgage insurance, the lender adds the insurance charges to your mortgage payment.

Apply For Conditional Approval

Home Loan Application

Conditional approval will give you an idea of how much money youâll be able to borrow.

To apply for conditional approval, please talk to our home loan specialists and they’ll help you with your application.

Once your application has been submitted, we’ll be in touch within 10 business days. If your application is urgent, please call .

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What To Keep In Mind

Before you buy, remember your next home is an investment. So be sure your next property and its location meets your housing needs. Draft a list of pros and cons to help. Ask yourself why you want to move and be realistic about how much you can afford.

Estimate your available equity and find out how much you may qualify to borrow with our home equity calculator.

An investment property can deliver a nice profit. Sources of income vary:

  • Renovate and sell it at a higher price
  • Rent it out for a monthly income
  • Hold it until it increases in value, then sell and take the profit

Best Alternatives For First

If youre a first-time homebuyer, check out the top five mortgages for first-time homebuyers, which we blogged about here. Even if you dont fit the profile for a conventional loan, there are several advantages available to first-time homebuyers.

The FHA loan is another great option for homebuyers. The FHA loan has flexible approval requirements and offers low rates and a low down payment.

If youre an active member of the military, the VA loan is a great option with several benefits, including low rates and a 0% down payment requirement. Find out more on our recent article posted here.

Working with a qualified mortgage advisor who understands your situation is the best decision you can make. An experienced mortgage advisor can recommend custom loan options and help you get approved for a preferred mortgage.

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What To Bring To Your In

We want you to be ready for the pre-approval process and being prepared will help. For your meeting, you should plan to bring the following:

  • Current address
  • Previous address
  • Current employment information
  • Previous employment information
  • If self-employed, the last 2 years Notice of Assessments from your Income Tax return
  • Value of properties, automobiles, investments, and savings
  • Most recent statements for mortgages, loans and lines of credit
  • Most recent credit card statements
  • Estimated value of your home
  • Housing expenses
  • Financial information for your co-borrower, if applicable
  • Social Insurance Number

Apply With Different Lenders

How to Apply For a Home Loan [Getting a Mortgage Step-By-Step]

Different mortgage lenders set their own rates based on the factors mentioned above — credit score, debt-to-income ratio, earnings, and funds available for a down payment. That’s why it’s a good idea to fill out more than one mortgage application. The more offers you get, the easier it’ll be to compare your choices and come away with the best deal on a home loan.

That said, it’s a good idea to shop around for a mortgage loan within the same 14-day period. Whenever a lender pulls your credit report, it counts as a hard inquiry on your record. Too many hard inquiries could hurt your credit score, but if you apply for multiple mortgages within 14 days, all of those applications will count as a single inquiry.

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Review Your Loan Estimates

Time: 1 hour to several hours


Applying to more than one lender has given you options. Now use your Loan Estimate forms to compare terms and costs.

At the upper right corner of the first page youll see expiration dates for the interest rate find out if it’s locked and closing costs. Ask the lender to explain anything you dont understand.

If the numbers seem dizzying, Dont focus too much on rate, Burrage says. Instead, look at the four numbers in the Estimates Comparisons section, on page 3. These will allow you to easily compare offers:

  • Total cost in five years. This is all charges including interest, principal and mortgage insurance that you’ll incur within the mortgage’s first five years.

  • Principal paid in five years. This is the amount of principal youll have paid off in the first five years.

  • APR. Also known as its annual percentage rate.

  • Percent paid in interest. This is the percentage of the loan paid in interest over the entire life of the mortgage. It’s not the same as the interest rate.

The lender

The lenders job is to answer all your questions. If you cant get good answers, keep shopping.

How Much Can You Borrow

Remember, since this isnt your primary residence, the down payment you will need for a U.S. property will be more that what you would have to put down as a down payment for your primary residence in Canada.

The down payment requirement will vary based on your intended use of your U.S. property:

  • Personal Use Property: If the property you are buying is for personal use then you can generally borrow up to 80% of the value of the property so youll only need a 20% down payment. The value is determined by the lesser of an appraisal or the price paid.
  • Investment Property: If you are looking to buy an investment property, or a property that you intend to rent out most of the time, you can only likely borrow up to 60% of the value, which means youll have to come up with a down payment of about 40%.

We define a vacation or second home as a property that is available to the owner/family for at least 2 – 3 months during the year and the owner uses for at least 2 – 3 weeks for his direct personal use, says Forget, Owners dont have to stay in the property for 2 – 3 months, but it has to be non-rented to a third party during this period of time and they need to stay in their property for at least 2 – 3 weeks.

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Is Lenders Mortgage Insurance A One

Yes, lenders mortgage insurance is a one-off payment, paid during the settlement of the loan. It is not required to be paid regularly like your mortgage repayments, so youll need to factor the lump-sum LMi payment into your budget before buying a house.

Loans with a deposit of less than 20% will usually require you to pay lenders mortgage insurance.

Our Favorite Mortgage Lender

How to Apply for a Mortgage

There are a lot of companies offering competitive mortgage rates, but theyre difficult to find one by one. Thats why we like , an online marketplace to compare mortgage quotes. Youll simply enter the homes purchase price, your down payment amount, your state, choose your mortgage product type, and your credit score to get mortgage rates and offers from multiple mortgage lenders.

Another service we like is , which also moves the approval process completely online. In just three minutes, Credible offers loans from multiple lenders without revealing your personal data to them. You can even quickly generate a preapproval letter that you can use to start your home-shopping process.

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Mortgage Life Disability And Critical Illness Insurance

Optional mortgage insurance products include life, illness and disability insurance. These optional products are different from mortgage loan insurance.

They can help you make your mortgage payments, or help pay off the balance on your mortgage if you:

  • lose your job
  • become critically ill
  • die

Your lender might offer you optional mortgage insurance when you get a mortgage. You dont need to purchase the insurance to be approved for a mortgage. The lender adds the cost of these optional products to your mortgage payment.

There are important limits on the coverage that optional mortgage insurance products provide. Read your policy carefully and ask questions about anything you dont understand before purchasing these products.

Find A Lowmortgage Rate And Save

If you plan to buy a house anytime soon, now is the time to start thinking about themortgage application process.

Take a look at your credit, getyour debts in check, and start shopping around for rates.

Try to see your financial life the way a lenders underwritersees it before starting your loan application.

Remember, the most important thing you can do before house hunting is to get pre-approved and determine your budget at todays rates.

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How Do Lenders Check I Can Afford A Mortgage

Lenders will work out your household income including your basic salary and any other income you receive from a second job, freelancing, benefits, commission or bonuses.

Checking affordability is a much more detailed process. Lenders take all your regular household bills and spending into account, along with any debts such as loans and credit cards, to make sure you have enough left to cover the monthly mortgage repayments.

Im Actively Shopping For A New Home

How to Apply for a Mortgage | Home Loan Application Tips | First Time Homebuyer Tips

If a move is in your near future, these are the two most important things you should do first. Theyll put you in the hands of experts who help people like you become a homeowner for the first time every day.

First, get approved for a loan. Doing this before looking at houses helps you a lot. Here are some of the benefits:

  • Youll get an approval letter that shows real estate agents and sellers youre able to afford a house.
  • Youll find out how much house you can afford.
  • It makes the rest of the mortgage process smoother and easier.

Learn what happens when you apply.

Next, find a real estate agent. After you apply and get approved, choose a real estate agent. Theyre another great source of experience and knowledge when it comes to how to buy a home. You can expect your agent to do these things:

  • Help you find the right house in the right place at the right price.
  • Manage paperwork.
  • Negotiate with sellers.

With an approval letter and listings from your agent, youll be ready to start hitting those open houses.

Also Check: How To Purchase A House That Has A Reverse Mortgage

Criteria For First Time Home Buyers

The First Home Owners Grant has different requirements and eligibility details in every state, but the way it generally works is:

  • You need to be a permanent Australian resident and at least 18 years old
  • You need to buy a new or current house as an individual
  • You must not have used the grant previously
  • You must not have owned a home since the year 2000
  • You must plan on living in the house for a minimum of six consecutive months

Check your states eligibility details for more information.

How To Apply For A Mortgage

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  • 6 steps to applying for a mortgage
  • Youve decided to buy a home. Hooray! Now you need a mortgage. Take a big breath its not every day you apply for a loan with that many zeros.

    Preparation is key, because after your purchase offer is accepted, the clock is ticking. Closing a mortgage transaction takes about 45 days on average.

    If you enter into the process without information, it could slow you down, says Randy Hopper, a vice president at Navy Federal Credit Union.

    Recommended Reading: What Are Mortgage Underwriters Looking For

    Check Your Credit Reports

    Before you get too deep into the mortgage application process, its a good idea to take a step back and check your credit reports first. The health of your credit will play a big part in getting a good deal on a home loan, or even getting approved at all.

    Start by pulling your credit reports from each of the three major credit bureaus: Experian, Equifax and TransUnion. The easiest way to do this is by visiting, the only website thats authorized by federal law to provide free credit reports once per year.

    Next, review your reports to ensure there are no errors or accounts that arent yours listed that may have damaged your credit. For example, review your personal information such as name, address and Social Security number for accuracy. Also check that the credit accounts and loans listed on your reports have been reported properly, including the balance and status. Double-check that there are no mysterious accounts opened, which would signal possible identity theft.

    If you find an error, you can dispute it with the bureau thats reporting the incorrect information by visiting its website. Once you submit a dispute, the bureau is required to investigate and respond within 30 days.

    How Long Does A Mortgage Pre

    Pension Powered Home Guaranteed Loan application ...

    Mortgage pre-approval, or conditional approval, usually lasts between three and six months with most traditional lenders. They dont like to do pre-approvals for longer than this as peoples financial position can change, as can the property market.

    Getting pre-approved for a loan amount can give you a better idea of your borrowing power, speeding up the application process.

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    Applying For A Mortgage After Foreclosure

    If youve lost your home to foreclosure, you may be wary about buying again and youre not alone. The good news is, buying a home after a foreclosure is possible! It always pays to find out the facts about applying and exploring your options. Heres three steps you can take to get started with your next home purchase.

    What Qualifies As A Good Credit Score

    For those who arent as familiar with their credit score, its a three-digit number that encompasses all your credit-related activity into one cumulative average. In Canada, credit scores range anywhere from 300 to 900. The higher your credit score is, the better your chances are of getting approved for various loans and other credit products. Generally speaking, a score of 650 and above is considered good and means that you are a low default risk and a better candidate for lending. A credit score of 750 or higher is deemed excellent.

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