subject: Finding the Best Mortgage Rates [print this page] Finding the Best Mortgage Rates Finding the Best Mortgage Rates
Before you starting shopping around to compare prices with the various lenders, you want to first assess your situation. Figure out what you are looking for in a loan. How much do you have available for a down payment? How much can you afford to spend on a house? How much can you afford in a house payment? These are some of things you will need to consider before you start looking for a lender. When it comes time to apply for the loan, here are some things you can expect. The loan application process requires lots of paperwork. The loan application itself will ask for details regarding your employment, the house you are looking to purchase, and other personal information. You will also be asked to give information regarding your personal finances, such as your earnings, the debts and expenses you have every month and any additional income you might have. The lender may require that you have documentation as evidence to your personal finances. Your personal finance situation and the value of the property will determine the maximum amount the lender will loan you. The lender will also look at your credit report. If there is anything unfavorable on that report, the lender can reject your application. Acquire a copy of your credit reports from all the credit reporting agencies before you apply for the loan to make sure that the information being reported is correct. It is common for decisions on loans to take as much as 30 days. Check with the lender to find out how long the decision process will actually take. FHA and VA loans will usually take longer. Some lenders require 20 percent of the home's purchase price as a down payment, but there are many lenders that offer loans that require less. If the 20 percent is not made, you will usually be asked to purchase private mortgage insurance. Private mortgage insurance is designed to protect the lender in case you don't pay. You will want to ask the lender about their requirements for a down payment, and about any special programs they have to offer. If private mortgage insurance is required, you will want to ask the cost of the insurance, the monthly payment for the private mortgage insurance, and how long are you required to carry the insurance. Some lenders will allow you to discontinue the private mortgage insurance once you have paid 20 percent of the loan.
