Helpful Links
A variety of resources about Mortgages for Home Buyers and Homeowners from the US Government
http://www.usa.gov/shopping/realestate/mortgages/mortgages.shtml
Understanding Home Mortgages from the Federal Reserve Board http://www.federalreserve.gov/pubs/mortgage/morbro.htm
http://www.federalreserveconsumerhelp.gov/index.cfm?nav=9493
A variety of financing resources from our national affiliate, the National Association of Home Builders
http://www.nahb.org/page.aspx/category/sectionID=125
Resources from Fannie Mae
http://www.fanniemae.com/homebuyers/index.html
Resources from Freddie Mac
http://www.freddiemac.com/corporate/buyown/english/mortgages/what_is/
Resources from the Federal Trade Commission
http://www.ftc.gov/bcp/menus/consumer/credit/mortgage.shtm
Resources from the US Deartment of Housing and Urban Development
http://www.hud.gov/buying/index.cfm
Mortgage Financing is Available and Still at Great Rates
While home mortgage rates have fluctuated, both up and down by a few points this spring and summer, the reality is that rates have been hovering near historic lows. But now, as economists are signaling a bottoming of the recession and expectations of recovery later this year or early next, rates are likely going to rise. House prices aren’t expected to drop much lower either, so now is a great time to buy.
But, can you get mortgage financing? The answer is yes. Fixed-rate (30-year, 15-year, etc.), ARMs (Adjustable Rate Mortgages), jumbo loans, even down payment assistance programs are available for qualified buyers. Lenders have returned to the more traditional methods of qualifying buyers (you won’t be able to get a loan just on your good looks any longer), but with a little effort, you’ll be assured you can meet your mortgage obligations.
Find a Mortgage Lender First
Don’t wait until you have found the perfect home, talk to a lender first. You’ll be able to get a clear understanding of the loan options available, and even more importantly, know how much home you can afford.
“It pays to shop around, but ultimately, it’s up to you to do your due diligence to determine the lender that best meets your financial needs,” says Welsch.
“Beginning the process early gives you time to uncover and address any qualifying issues before your closing occurs,” explains David Welsch, an independent mortgage consultant. “Credit, employment concerns, income qualification, and underwriting guidelines can present challenges to closing your loan.”
And before you choose your lender, make sure to ask for a Good Faith Estimate/Truth in Lending disclosure which itemizes all charges and costs associated with your loan. This document lets you compare lenders’ costs quickly and easily.
Once you have decided which lender and loan is best for you, seek full mortgage approval. “This means that the entire loan file has been underwritten, subject to closing conditions,” Welsch says. “There’s a big difference between being pre-qualified and having a fully-underwritten loan approval.
“A mortgage approval letter assures you and a potential seller that a mortgage lender will lend you a certain amount of money to buy a home, subject to a property appraisal and other stated conditions. You'll be able to look for a home with the security of knowing exactly how much you can borrow, and it shows a builder that you have the financing you need to buy a home.”
Welsch provided several additional recommendations for buyers:
- Live within your comfort level. You don’t have to go for the biggest loan amount you are approved for.
- Read and understand your mortgage documents. If anything is unclear, ask your lender for clarification.
- Be prepared for closing and work with your lender. Provide requested documentation in a timely manner and stay in touch with your lender before closing.
- Never feel pressured into signing any document you don’t understand or feel uncomfortable about.
Your new home is probably the biggest purchase you’ll ever make. It will provide comfort and shelter, and become the backdrop for precious memories for you and your family. So make sure you take the time to ensure you’ve selected the right financing and the right lender for you. For a list of professional lenders just click on the Products/Services search button on our home page and choose “mortgages.”