If you are in the way of buying your dream home, you have a crucial response at your hand. It is a huge work if you are a first-time buyer. It has a lot of paperwork to be done that even includes credit reports.
Of all these tasks in hand, thinking on the monthly mortgage payment is something very serious to be looked into. Apart from the credit score, the Best Money Lender will look for many other factors to determine whether you qualify for the applied mortgage and the interest rate at which you will pay.
Many factors determine the mortgage rate. If you need the best mortgage rate, you should be well qualified for it. In this article, there are some key criteria that mortgage lenders will evaluate and some tips to improve your current standing.
However, before starting, if you do not meet the minimum credit score and you need to improve it and get the best rates available in the market, you must monitor your credit scores and try making improvements every time. To do this, you can pay all the pending loans, pay the past due to collection accounts, clean the errors and make your credit report efficient.
Employment and Income Stability
Generally, the Best Money Lender will prefer those candidates who can prove steady employment for 2 years at least. A long period of unemployment is a bad sign in your application. You should be consistently employed in a profession or you should have jumped to another job for a higher income. These are something that the mortgage lenders expect.
Self – employment is more strictly monitored by mortgage lenders. They will require you to submit the document of your business income with the income returns for the past two years. They will ask for the IRS form and check whether you have sent them the same. So do not think to provide the false documents. You will be in big trouble.
Debt to Income ratio
It comes in two forms. Your monthly minimum debts and your proposed housing payment divided by your stable gross income which is the measure of the back – end ratio. On the other hand, the first end ratio is only your housing costs and it does not consider all the other debts.
You will need a minimum of 20 % down payment to get the best mortgage rate. Since the mortgage is price adjusted depending upon the risk factors a little drop is taken as the high risk and it also accompanies a high-interest rate.
In the world of mortgage, cash reserves are measures in terms of the number of months of the house payments that you have saved in cash. The reserve also includes the money that is saved in the savings accounts, certificate of deposits or other money market funds.
You have to know that the money in your retirement plan will not be included as that can be withdrawn only after paying taxes and penalties. The usual requirement for cash reserves on a mortgage is only two months.
You would have enough liquid cash after you close your new mortgage payment in the form of a principal, interest, taxes, and insurance for the next 60 days. And as guessed, on the higher risk mortgages, the requirement of cash reserve requirement will be higher.
Finding the best mortgage rates
The first step after you make up your mind to get the best mortgage rate, you have to make time for comparison shop with the Lender SG Website. This is easy to do and their many options to explore and also to choose from. The internet is the best place to start. You can compare many attractive rates among the different lenders in the market.
There are exclusive sites for the real estate industry as well that provides information on the list of mortgage lenders. You will have to read through the site and know how to use it in the beginning. Then you can input certain information like contact information and start your work. After you have given the inputs, lenders will contact you with the rate quotes.
Check with the bank or the credit union
Do not ignore to check with the bank or the credit union. It is normal for the banks to have a preferred rate for their customers that are lower than what is available to the general public. As you already have some correspondence with the bank you have the chance of getting approved with the lowest possible rate. Financial institutions like Lender.sg that offer discounted rates. Do not ignore to check the Lender SG Website.