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New Mortgage

Updated on September 6, 2016

Looking for a New Mortgage

So, you want to find that New Mortgage Loan that fits your needs, right? Sure you do and here is the place to get some ideas of where to look and what to look for.

What should you consider?

1. Are you a first time homebuyer?

If you are a first time homebuyer, do you need minimum down payment requirements? FNMA as of 12/13/2011 will allow higher loan to values for financing. There will be a three (3) % down payment if the loan can be run through their automated underwriting system (DU). These funds may come from flexible sources; to include a gift from a relative and assistance from an employer. Certain restriction may apply but this is a step forward for lenders who sell their loan to FNMA as the prior guidelines would only allow for a minimum of 5% down payment from the applicant's own funds. With a conventional loan sold to Fannie, there is only the monthy MI (mortgage insurance) premium for loan to values greater than 80%.

FHA allows for 3.5% down payment from flexible source of funds for credit score >580. Credit score less than 580 will require a 10% down payment. Now, please note that some lender guidelines may vary with regard to minimum credit score even though FHA will allow a lower score. FHA MIP (mortgage insurance premiums) for 30 yr mortgage are: 1% upfront MIP that is added into the loan amount and then an annual MIP that is paid monthly for loan to values greater than 95% which is .90 mortgage premium.

2. Are you selling your current residence? If you are selling your home, you must realize that unless you do not have a payment; you cannot qualify without the current payment unless the house is sold or about to be sold.

3. How much down payment funds, closing cost and reserves do you have for this loan? Do you have at least 3% down payment and closing cost of another 2 or 3%? Reserves will depend upon what your credit package looks like and you could need at least 2 months reserves.

4. Do you have to sell your current residence prior to closing your new home? If you are selling your home for your closing cost and reserves you may need to have a prospective borrower lined up and ready to close prior to applying for a mortgage loan. If you do not; you have to be able to qualify for both payments

5. What does your credit look like? Have you checked your credit online or had your credit run recently? Do you know that based upon your scores only; you can possibly qualify?


Get approved for that New Mortgage
Get approved for that New Mortgage

What to Expect

You should expect your lender of choice to give you a preliminary decision based upon the information you have rendered. The preliminary decision is sometimes called a preliminary approval or credit approval. What this means that per your credit and the information which must be verified from the application; it appears your loan will get to a final approval. Not guaranteed; please remember. Not only does the credit file have to be processed; but the property must be evaluated also and meet certain standards.

If the information verified does not match what your information is on the application; you can could be denied. This is why the initial mortgage application process is so important. You should have accurate information to begin with. How long have you been at your current employment? What your monthly income is and how you get paid. It depends upon what is stated or shown on your pay stub and it can be figured by your. How much money you have saved for the transaction or, are you expecting to receive a gift? From whom and how much. Is it a relative, employer etc.?

You entire financial profile must be handed over the loan officer/loan representative and it must be accurate or your approval could be put at bay. You do need adequate and correct information.

What you will receive from the Loan Officer:

1. Good Faith Estimate (if not at application; it must be mailed within (3) business days.

2. Truth in Lending form, preliminary (if not at application; it must be mailed within (3) business days.

3. Transfer of Servicing disclosure (if not at application; it must be mailed within (3) business days.

If your loan is denied within the (3) business days; these disclosures are not required.

A List of the Top Lenders

 

Wells Fargo

Bank of America

CitiMortgage

Chase Mortgage

Ally Bank (GMAC)

PHH Mortgage

Met Life

SunTrust

 

 

Comments

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    • lctodd1947 profile imageAUTHOR

      lctodd1947 

      7 years ago from USA

      Reynold Jay...thank you for the sound advice. I appreciate coming here to read and comment and the good words. Come again please.

    • Reynold Jay profile image

      Reynold Jay 

      7 years ago from Saginaw, Michigan

      I decided to read this one because it is one of your latest HUBS. I sold two homes and bought one this year and do it often enough I really understand it all. Good information for everyone to know. Read THE CARROT and KINDLE when you are ready to write that book. It is the definitve HUB on writing and breaking into the little leagues without a lot of heartbreak and fuss.

    • profile image

      Mortgage Buyer 

      7 years ago

      Hello,

      Thank you for the nice compliment. I appreciate it. Last few months I am looking for a new mortgage. So, please give me some instruction about mortgage.

    • lctodd1947 profile imageAUTHOR

      lctodd1947 

      7 years ago from USA

      mwatkins, thank you for coming by to read and comment. Refinance have been the bulk of originations it appears but noticed that Freddie Mac has about 1.02T in originations. JPMorganChase originated 51B...it looks like the mortgage industry should be doing fine with all of these fees they are charging. It may not be stable as far as new homes or purchases but they are bring in money now. At least from the Mortgage News Daily report; the volume is not bad for the economy we see.

      Thanks again for stopping by.

    • mwatkins profile image

      mwatkins 

      7 years ago from Portland, Oregon & Vancouver BC

      Great info on a mortgage! This is a tough economy for all right now. Seeking pre-approval can really help people find out what they need to do to move forward if they are considering buying a home. I know that loans are tightening up, house prices are dropping and we are at 47% foreclosure right now, with rising unemployment, so ANY information home buyers can get helps. Thanks for your hub to help educate people - good job!

    • lctodd1947 profile imageAUTHOR

      lctodd1947 

      7 years ago from USA

      prasetio30...it is so good to see you here again. I have missed your wonderful comments. You are always an encouragement. Thank you for coming here to read.

    • prasetio30 profile image

      prasetio30 

      7 years ago from malang-indonesia

      Another great hub from you. My friend, you always come up wit useful information. This made you looks special in front of me. But I believe many of us liked this hub. Take care!

    • lctodd1947 profile imageAUTHOR

      lctodd1947 

      7 years ago from USA

      bettybarnesb, That is wonderful for your daughter that she was able to get a house that was reduced in price. A lot of individuals are doing the same thing. Hopefully these subdivisions will recover from the downward values that have existed.

      Thanks for your comments and stopping by. I appreciate it.

    • bettybarnesb profile image

      bettybarnesb 

      7 years ago from Bartlett, TN

      My daughter and her husband bought a new home 2 months ago. The house was on its way into forclosure. Although they got a great deal on the house it took a lot of work and time bringing it out. Beautiful home and yes they were first time buyers. I am thankful they had some money saved up. It helped with the transition. Great hub!

    • lctodd1947 profile imageAUTHOR

      lctodd1947 

      7 years ago from USA

      onceuponatime66, thank you for your comments and taking the time to stop by. Yes, I think Fannie has seen the light regarding the fact that so few first time homebuyers have a lot of money to pay down on that first home.

      Thank you again for stopping by.

    • onceuponatime66 profile image

      Jackie Paulson 

      7 years ago from USA IL

      I enjoyed learning from this hub and mortgages. FNMA and the 3% down is awesome for new home buyers

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