Category: Home Loan

How getting pre-approved for a home loan works

Written by Priority Lending Admin on . Posted in Home Loan. Leave a Comment

How getting pre-approved for a home loan worksApplying for a home loan is a rigorous process that involves multiple steps. Many people do to alleviate some of the stress associated with applying for a mortgage is to get pre-approved. Getting pre-approved for a mortgage means that a lender will review your information to decide if you would be approved or not. Pre-approvals do not guarantee that you will be approved for a home loan.

What Pre-approvals do when looking for a home loan

Pre-approvals are more of a precautionary measure to help you assess what homes you should be looking into. Most sellers are more willing to negotiate prices with pre-approved people. This is just one of the many benefits of getting pre-approved.

If you’re interested in getting pre-approved for a home loan, there is some important information you need to know. Below, we’re going to provide you with all the details about why you should consider getting pre-approved for a home loan.

How getting pre-approved for a home loan works

Before getting pre-approved for a mortgage, there are several things you should do. First, you should always review your current credit score and debt-to-income ratio. This will give you an accurate look into how much house you can actually afford.

Many mortgage lenders want to see a minimum FICO score of 620 before even considering approving your application. The lower your score is, the more down payment will be required upfront at the time of closing. Credit is just one of the critical factors that determine your pre-approval odds.

Here are the other four factors that impact your mortgage pre-approval process:

⦁ Proof Of Employment- before any lenders approve you, they’ll need to see evidence of your employment. You can use W-2 or pay stubs statements to prove your income. The more your income matches your desired loan amount, the higher your approval odds are.
⦁ Proof of Assets- you need to verify your assets before any mortgage lender will take you seriously. You’ll need to provide records of your finance and investment accounts.
⦁ Proof of Income- lenders will want to see your previous year’s tax returns and any other documents that can prove your source of income. This adds even more security for lenders against borrowers who default.
⦁ General Documentation- you’ll need to provide personal information about yourself, like your social security number and driver’s license at closing.

Benefits of getting pre-approved for a home loan

The primary benefit of getting pre-approved for a home loan is that you have set boundaries. Mortgage pre-approvals qualify you for a specific loan amount; without it, you can spend lots of time on loans that you never qualify for in the first place.

Lenders assess all of the above variables when determining whether to approve your loan application or not.

People Also Ask

Q: How long does it take to get pre-approved for a mortgage?
A: on average, it only takes 1-3 days total to receive a decision on your mortgage pre-approval application. The process can take longer, depending on any issues that arise during processing.

Q: What to do before getting pre-approved for a mortgage?
A: Before applying for mortgage pre-approval, you need to follow a few steps. First, get a free credit score and review your debts. Next, organize all of your personal and financial information. Finally, submit your mortgage pre-approval application.

Q: Can a loan be denied after pre-approval?
A: yes, even after getting pre-approved, you can still be denied a mortgage. The pre-approval process is just a pre-emptive measure for you to determine how much house you can afford.

Understanding how getting pre-approved for a home loan works

To make the process of buying your next home smooth and straightforward, get pre-approved. Use all of the information in this article to help go through the entire process. So, you can start living in your new home today! Looking to get approved for a loan? Contact Priority Lending today to get started.

What Is the Best Mortgage?

Written by Priority Lending Admin on . Posted in Home Loan, Mortgage. Leave a Comment

So what is the best mortgage? There are different types of home loans available for people looking to move into a new home. There are two main types of fixed-rate mortgages and adjustable-rate mortgages. Fixed-rate mortgages lock in your interest rate. Adjustable-rate mortgages have the possibility of increasing your interest paid over time.

If you’re looking for a new house, you will need to get a mortgage for the new property you plan on moving into. There are several types available to individuals. Applicants who meet specific criteria and requirements can apply for mortgages. One mortgage type may be suitable for someone. On the other hand, that doesn’t mean that the same mortgage set-up will work for you. For example, let’s look at variables such as:
 
  • Income
  • Marital status
  • Debt
  • Credit score
These play a huge role in determining whether you get approved for a mortgage.

What Is The Best Mortgage?

It’s essential to become educated about all of the various mortgage options out there so that you can secure your home for a long time to come. You should always consult with your realtor before closing a deal on any home as they will be able to give you advice that relates to your specific situation. Moreover, educating yourself will be time well spent.

However, a few general rules apply regardless of who you are in terms of mortgage configurations. Continue reading to find out about the various mortgage options available and how you can go about choosing the right one for you.

Types of mortgages

In this paragraph, we will look at the types of mortgage available. There are two primary types of home loan options; they are fixed-rate mortgages and adjustable-rate mortgages. Firstly, fixed-rate mortgages lock in your interest rate for life while secondly, adjustable-rate mortgage interest rates can change within any given year from the time that the loan was taken out. It all depends on whether you want to take the brunt of interest upfront. If you slightly delay it a bit, you will still be responsible for paying the higher interest rate if it rises so fixed-rate mortgages tend to be ideal.

Mortgages can be allocated in different lengths; this gives you the ability to choose how long you want to take to pay off your house fully. The most common mortgage lengths are 15yrs, 30yrs, and 50yrs. Keep in mind that the longer you take to pay your home off, the more interest you will pay. With this in mind, let’s look more in-depth.

Choosing the best mortgage for you

Above all, deciding on which mortgage type is right for you really boils down to your current financial situation. If you make an adequate amount of money each year but have some outstanding debts, you may want to go with a fixed-rate mortgage for the long-term. Alternatively, and most importantly, if you make decent money and have no debt obligations, you can opt for an adjustable-rate mortgage at a 15-year term. As a result, it would be beneficial to discuss all of this with your mortgage lender.

People Also Ask

Q: What type of home loan is best?

A: Generally speaking, non-conforming and other conforming mortgage set-ups are best because they require the lowest down payment for qualified first-time buyers.

Q: How do you know which mortgage is right for you?

A: You first need to find out how much house you can afford, by establishing this, you will be able to find the right home loan in no time.

Q: What is the best bank for a home loan?

A: All bans are different; however, some of the best banks to obtain a home loan through are available on request.

Conclusion

By now, you know about all of the various home loan types available. Before making a decision about which one is right for you, ask yourself these two simple questions: “Am I comfortable with the idea of possible paying more interest over time?” and “How fast do I want to pay off my house?”.

Please see our First Time Buyer page if this is going to be your first home purchase.

Investopedia has an awesome article on how to choose the best mortgage.

How to Get Approved for a Mortgage

Written by Priority Lending Admin on . Posted in Home Loan, Mortgage. Leave a Comment

Getting approved for a mortgage isn’t a complicated process. You need to make sure that you have all the proper documentation to increase your chances.
 
  • Check your credit score
  • Bring a nice down payment
  • Review any outstanding debts you have
  • Try to get pre-approved for a mortgage before going out to look at homes
 
If you’re moving from one existing home to another or are embarking on your very first home ownership adventure. The first thing you need to do before thinking about closing the deal and moving in getting approved. Mortgage approval requirements vary based on a lot of factors such as your pre-existing credit score, salary, marital status, and more.
 
You can get pre-approved for a mortgage by lenders before even stepping foot into a property. This is commonly known as pre-approval. By doing this, you will be able to gain a clear vision of what houses you can afford. And importantly, which ones you should avoid altogether.
 
Pre-approval isn’t the only way to get approved. Several programs are designed to help people secure a mortgage on their dream home regardless of their current financial status. To better understand what you can expect when trying to get a mortgage, we’re going to give you a detailed breakdown below.

How To Get Approved For A Mortgage

Getting approved for a mortgage

When you find the home you want, you will have to sit down with your real estate agent and whatever broker owns the property. This is where all of the mortgage approval happens, to begin the process, you need to bring a few essential documents with you.

Here are all of the things lenders look for when deciding whether you are approved for a mortgage.

Factors That Impact Your Odds Of Being Approved For A Mortgage

  • Total monthly income
  • Credit Report
  • Summary of All Your Current Monthly Debt Payments
  • Down Payment
  • Sensible Idea of How Much You Can Afford

Once you have all these pieces of information in order, you will be able to begin the process of applying for a mortgage.

Closing the deal

The final decision as to whether you’re approved or not lies in the hands of the lender. Some lenders take all of the factors we mentioned above into consideration when making their final decision, while others only consider a few of those variables. If you’re unsure about how likely you are to get approved for a particular mortgage, go online and look for a pre-approval program so you can get a clear picture of how much house you can afford.

People Also Ask

Q: How can I get approved quickly?

A: The best way to get approved for a mortgage reasonably quickly is by having a concrete understanding of your financial situation before going out to look for homes. Here are some tips you can use to secure a home mortgage loan pretty fast: establish a clear budget before looking for homes, know your credit score, have cash on hand, pay off any of your outstanding debts, and try to gain pre-approval status.

Q: How hard is it to get approved for a mortgage?

A: Getting approved for a mortgage is not difficult; however, it can be a complicated process depending on all of the factors impacting your specific situation.

Q: What credit score do you need to get approved for a mortgage?

A: FHA loans require that you have a minimum credit score of 500-580 depending on your down payment amount. For other mortgage types, the minimum score is about 620.

Conclusion

We’ve covered all of the important facts and information that you need to know about securing a home mortgage. Ask yourself these two questions before starting the process, “How much house can I reasonably afford?” and “What is my credit score?” These will help you increase your odds of getting approved for a mortgage.

Here is a great article from Investopedia.

You may also want to read our Prequalify For A Mortgage page.

Can you get a mortgage with no credit?

Written by Priority Lending Admin on . Posted in Home Loan, Mortgage. Leave a Comment

Can you get a mortgage with no credit?

Can you get a mortgage with no credit? If you want to buy a home but have a limited or nonexistent credit history, it can be difficult. You need to find a mortgage lender who will accept your application. Most lenders need applicants to have some sort of credit established. This can be through car loans, student loans, or such like.
Yet, FHA loans allow you to buy property without the need of having to show your credit score. You can use “non-traditional forms of credit”. For example, this can be proof of your rent payments, to apply for an FHA loan. For first time home buyers, finding a mortgage lender willing to get you in a home is no problem.
But, that’s because they need you to have a good credit score. Additionally, having good finances before you can get approved for a home loan is better. This may not be challenging to most. There are individuals who have a limited or completely empty credit profile. If you’re one of those people, the good news is that you can still buy a home with an affordable interest rate. Even with a low down payment. So, to get a mortgage without any prior credit history, you will have to apply for an FHA loan.
 
FHA loans are the best option for anyone interested in buying a home the first time but don’t have the credit to do so.
If you want to learn more about FHA loans, continue reading to find out all the critical details you need to know.
 

Is it possible to get a mortgage without credit?

Most lenders require that you show some proof of credit history when applying for a home for the first time. But, with FHA loans, you can get approved for a home. Show receipts that you’ve paid your rent on time or any other valid proof. Substantiate your claims of being financially responsible.
 
Keep in mind; even FHA loans have specific requirements. You must meet these to be eligible to receive the benefits of this specific loan type. For most standard mortgages, you must have a credit score of at least 600 or higher to qualify for financing. With an FHA loan, you need to show proof that you’ve paid your utility bills on time to qualify.
 
Here are some of the documents you can use to apply for and get approved for an FHA loan:
 
  • Car insurance payments
  • Rental payments
  • Utility payments
 
As long as you have one or a combination of these documents, you will be able to qualify for approval for an FHA loan. You can apply without needing an actual credit score.
 
How to get a mortgage with no credit
 
As we mentioned above, the only real way to get a mortgage without any credit is by using an FHA loan. When applying for an FHA loan there’s a rule. You must pay a monthly insurance premium alongside your mortgage payments.
 
Your monthly insurance premium rate will typically be in the .80%-1.05% range. Private mortgage insurance comes with conventional loan types. The MIP is no longer applicable once you reach 22% equity in your property. With FHA loans, your monthly insurance premium is mandatory for the entire life of the loan.
 
FHA loans also come with a minimum down payment requirements of 3.5%. Usually, traditional mortgages have a 5% down payment.

People Also Ask

Q: How can I get a home loan with no credit?

A: If you don’t have a strong credit profile but are interested in owning a home, you need to look into what is known as FHA mortgages. FHA mortgages are loans backed by the Federal Housing Administration, and they allow applicants to use non-traditional credit histories to apply for mortgage loans. An example of non-traditional credit history would be proof of non-delinquent renter’s payments.

Q: Do you have to have credit to get a mortgage?

A: While most lenders do require you to have some sort of verifiable credit history before applying for a loan, there are options available to people who may have a limited credit history or no credit at all.

Q: Can I buy a home with 0% down?

A: Yea, there are first time home buyers programs out there which enable you to purchase a home without paying any money at closing outside the traditional closing costs. There are other programs out there that offer deals for as little as 3% down on your home for qualified buyers.

Conclusion

We give you all of the important tips, facts, and information you need to know about trying to obtain a mortgage with no credit. Use this write-up to assist in applying for a home with no credit so that you can skip the hassle involved in applying for a traditional loan.

You may also find the First Time Home Buyers page helpful.

 

What Is Today’s Mortgage Rate?

Written by Priority Lending Admin on . Posted in Mortgage. Leave a Comment

What is today's mortgage rate?

Today’s mortgage rates are at a 10-year low across the entire real estate industry. If you’re looking to buy a new home, now is the time to do so as you will be able to find great deals on lavish properties with low-interest rates on standard 30-year fixed contracts. The average mortgage rate in today’s climate is about 3.38%-4.56%.

In today’s age, new homeowners are faced with many economic challenges that previous generations didn’t have to deal with. One of those challenges has to do with variables mortgage rates that isolate entire portions of the population from even being able to qualify for a home loan. Everything in the world is changing at a rapid pace, and the housing marketing is no different.

Depending on the type of house you buy and the length of your mortgage contract, your mortgage rate can vary substantially from let’s say someone you know or even someone that lives in the same neighborhood as you. There are other factors that impact your final mortgage rates, such as your credit score and credit history.

Below, we’re going to go over the average costs of today’s mortgage rates so that you can get a clear picture of how much you will pay when moving into a new home.

The average mortgage rate in today’s economy

Mortgage rates vary based upon several factors, as we previously mentioned. Some of these factors include the length of your mortgage contract, your credit history, and the type of mortgage you want to take out against your home.

There are five different types of mortgage options available which are:

  • Adjustable-rate mortgages
  • Conventional fixed-rate mortgages
  • VA mortgages
  • FHA mortgages
  • Jumbo mortgages

All of these mortgage types come with different contract obligations length, approval requirements, and mortgage rates. If you’re unsure about which mortgage type is best for you, consider talking to your real estate agent so you can get personalized advice about which mortgage type is right for you.

While each of these mortgage types does come with their own rate based upon the length of your contract, there is an average across the entire industry you can look at to see an estimate of how much you will pay for a home. The average rate for a 30-year fixed mortgage is about 3.38%-4.56%, and that applies for FHA, VA, Jumbo, and conventional mortgages.

There are special programs available that are designed to assist first time home buyers with getting great mortgage rates for their new property. You can also find some other specialized homeowner incentive programs that give you unique deals on mortgage rates when you meet specific qualifications.

How to get the best mortgage rate for your home

One of the best ways to get a low mortgage rate on your home is by cleaning up your credit report and ensuring that you maintain a high credit score. For mortgage lenders, an ideal credit score is about 740+ for those applying for single-family homes that will be their primary residence.

If you are interested in purchasing a property outside of a single-family home that will be designated as your primary residence, you will want to speak with your realtor and finance company to see what requirements you must meet and what the average mortgage rates are for your individual situation.

Regardless of what kind of house you are looking to get into, mortgage rates across the board are down at a 10-year low across the board, so you’ll be able to find a deal on a beautiful home with no problem. One last thing you should remember is that you want to choose a mortgage rate that is compatible with your ultimate financial goals.

People Also Ask

Q: Are mortgage rates lower today?

A: When generally speaking, yes. Today’s mortgage rates are, on average, .03% lower than average fixed mortgage rate for 30-year loans in previous years. This is good news for any homeowner that is looking to purchase their first property right now as you can find tons of deals on great-looking properties that are affordable.

Q: What is the lowest mortgage rate ever?

A: The lowest mortgage rate ever recorded was during the week of Apr 30, 2020, when the national mortgage rate dropped to 3.23%, which is the lowest rate ever recorded by Freddie Mac since 1971.

Q: Is 3.25% a good mortgage rate?

A: if you’re looking at a 30-year fixed contract, yes, a 3.25% mortgage rate is an incredibly good rate to pay for a new home on the market.

Conclusion

Throughout this write-up, we’ve given you all of the critical details and information you need to know about today’s mortgage rates and how to find the perfect terms for your next home acquisition. Use all of these tips so that the next home you move into can come at an affordable price while also having all of the critical features you want most.

Here is a great article on Seven factors that determine your mortgage interest rate

You may also want to have a look at our main mortgage rate page

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