Key Considerations Before Applying for a Mortgage
“It is the quality of lending over the quantity of lending.” – Lewis Thompson Preston
A mortgage loan is obtained to finance the purchase of real estate or for other financial purposes, with the property serving as collateral against the secured loan. It is important to review loan options from reputable mortgage companies, taking into account the terms and conditions pertaining to the property lien and the loan itself.
Before exploring your options, it is essential to understand concepts such as credit score, mortgage rates, fixed and variable interest rates, loan tenure, and repayment terms. Familiarizing yourself with these aspects will provide a better understanding of the world of finance, particularly loans.
The Impact of Credit Score on Your Mortgage
- A credit score is a benchmark used by financial institutions to assess the capability of a loan applicant to repay their debts.
- Credit rating agencies evaluate an individual's credit history and provide a comprehensive report, which includes their credit score.
- A positive credit history, characterized by timely repayments and absence of defaults, will result in a favorable credit score and rating.
- Reputable mortgage companies typically offer secured loans or mortgages to applicants with a good credit history, as it indicates a lower risk for the financial institution.
- A higher credit score provides greater bargaining power when negotiating the terms of your mortgage.
Sources of Mortgage Financing
- While numerous banks and financial institutions offer mortgage options, it is important to choose from reliable sources and the best mortgage companies.
- Credit unions are a favorable starting point, as they provide competitive interest rates and have relaxed membership requirements to attract more customers.
- Mortgage bankers, specializing in mortgage transactions, can be an advantageous choice due to their expertise and close affiliation with a specific institution.
- Correspondent lenders work with third-party financial institutions to raise funds, making them a viable source for mortgage loans, as they can facilitate transactions with the best mortgage companies and banking institutions.
Mortgage Pre-Approval Process and Timing
- Pre-approval involves submitting relevant financial information to potential lenders before securing a mortgage loan.
- Even the best mortgage companies have a pre-approval process to verify loan applications.
- Documents required for pre-approval include social security numbers of all borrowers, bank account details, existing debts, income tax returns, proof of employment and income, and details of the intended mortgage.
- The time frame for the pre-approval process may vary depending on the lender.
Top Mortgage Companies in 2017
The following are considered the best mortgage lenders in 2017:
- Amerisave Mortgage
- ClearPath Lending
- First Internet Bank
- HomeDirect Mortgage
- J.G. Wentworth Home Lending
- Caliber Home Loans
- Vanderbilt Mortgage
- Jersey Mortgage Co
- Homebridge Financial Services
- 21st Mortgage Corporation
- Ocwen Financial Corp
- Mr. Cooper
- Pacific Union Financial
- Network Capital Funding Corporation
Before selecting from the best mortgage companies, it is crucial to compare mortgage rates and thoroughly review scheme-related documents.