BEFORE YOU APPLY FOR A MORTGAGE LOAN

This article will make it easier for you to qualify for a mortgage loan and help you cushion its long-run effect if your debt ratio is high. Chances are good that if you’re already paying rent, making a mortgage payment will be a smooth transition. Along with the mortgage payment, you’re also responsible for real estate taxes and insurance, and if required, mortgage insurance and homeowners dues. Work with us to determine the monthly payment you can afford based on your income and the standard debt-to-income ratio guidelines.

Before making a loan, most lenders will want to review how you have handled your credit in the past. This includes all credit accounts, including utilities, revolving debt. The world of home finance offers so many variables and options that it's often difficult to keep them straight. There are books that provide all the information you need to compare mortgages and find a home loan that's right for you.

The interest rate is important, but there are other costs to consider, such as discount points and even the type of mortgage loan. When shopping for best rates, compare combinations of discount points and loan types.

    Lenders are more likely to look favorably on an applicant who has been in the same (or similar) line of work for generally two or more years. If you have been working steadily for less than two or more years, expect the lender to ask why. There are many acceptable reasons, including:

·                    You recently finished school, vocational training, or left the military;

·                    Your work is typically seasonal and gaps in employment are customary to the industry You may have been laid off from your job;

·                    Frequent employment changes are normal in your line of work (sales, contract work, etc.), but you have been consistently employed and maintained a consistent level of income over the past 2 years.

For example, if your best guess is that you'll live in the house for eight years before moving, compare the total fees and monthly payments that you would make under three or four different loan deals. Ask yourself how much it would cost to pay zero discount points and get a higher interest rate compared to paying discount points in exchange for lower rates? You might quickly rule out some options, but at least you considered them. Bankrate.com's mortgage calculators will help you compare.