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Home | Real Estate


Helpful Advice on Getting a Home Loan

By: Serg Harros

Getting the best mortgage for a home purchase is often a subjective thing. The best option depends on your situation, but apply the following tips and you should end up with a good deal.

1. To minimize the stress of the real estate transaction, it is always best to get pre-approved for a loan. When you get pre-approved for a loan, the lender guarantees they will give you the pre-approved amount for a set number of days, often 30 to 60.

2. In the old days, it took weeks to get approved for a mortgage. Many lenders now use a software program to determine if they will give you a loan. If your credit is in good shape, it can take as little as three days for approval.

3. Interest only loans are a fairly recent creation that lower your monthly payment by having you only pay the interest due without any principal. Be careful with these. If the property does not appreciate, you gain nothing.

4. If you intend to buy a home in the next six months, you need to do mortgage planning. Get a copy of your credit report and make sure it is accurate. Start paying down debt so your debt to income ratio is good.

5. When you apply for a mortgage, the lender is going to ask you what reserves you have. Ideally, you should reserves equal to three months of your expenses.

6. If you pay points for a loan on a second home, you cannot deduct them from your taxes all at once. You must deduct them over the life of the loan.

7. This mortgage program involves a loan for 125 percent of the home value. It is used as a way to cash out a property if you expect significant appreciation over the near future. This is a very dangerous loan because if appreciation does not occur, you can get into significant trouble with negative amortization.

8. The tax code in the United States makes little sense, but it is helpful with refinancing. If you refinance your home, you do not have to pay any capital gains tax. This is true even if you refinance for more than the home is worth.

9. Don’t assume anything about your credit. Before you apply for a mortgage, check all three credit agencies. Congress has determined that 50 percent of the negative marks on most people’s credit are errors.

10. To get an accurate account of your closing costs, make sure to ask for a HUD-1 form. It has to set out all closing costs.

It can be easy to stress out when it comes to getting a home loan. Your best strategy is to get approved before you house hunt. Once you are approved for an amount, you can shop with the comfort of knowing you can make an offer in confidence.

Article Source: http://www.simplepetcare.com/pet-articles

Learn more about home loans at GWHomeLoans.com.
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