3 Tips on Getting a Home Mortgage

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Most homebuyers need mortgages to purchase a home. The process of getting a home mortgage can be a tad overwhelming if you have never done it before. When you are looking at thousands of dollars, you want to be sure that you are taking the right steps with your loan to protect yourself. Continue reading and discover a few helpful tips on getting a home mortgage.

Get your documentation in order

When it comes to getting a home mortgage, one thing is always certain. A homeowner will always be expected to supply a hefty supply of documentation. One of the best steps you can take as a homebuyer is to get your financial papers in order ahead of time to expedite the process. Documentation needed will include items such as bank statements, W-2s from your employer, retirement or investment accounts, tax returns, and bank stubs.

Get preapproved early

Another step you can take to expedite the home buying process is to get preapproved for a loan ahead of time. This is where many homebuyers go wrong. For whatever reason, they wait to get approved for a mortgage loan only to wind up being disappointed. If you decide to wait, you run the risk of another buyer jumping ahead of you or realizing that you do not qualify for a loan. Also, by getting preapproved early can make you more favorable to sellers because it shows you are a serious buyer who has their finances in order.

Explore your options

You have many options when it comes to mortgage lenders. With this, do not be afraid to shop around and see what is out there. You do not have to go with the first mortgage lender that you talk to during your search. It is in your best interest to speak with multiple lenders so you can compare and choose the option that makes the most sense.

HUD Foreclosures

HUD foreclosures and VA Foreclosures are some of the best homes to buy when price is part of the equation. As with most Americans, price is always a concern. If not buying the same house for less, why not buy more house for the same dollar invested? When looking for a good deal it is hard to do better than the VA or HUD foreclosures market. The simple truth is that there are just more VA and HUD homes on the market, as they represent such a large number of mortgages that are generated each year. This translates into more foreclosures just by the magnitude of difference between all others comparing to the two largest.

The two largest also being government owned and operated means that they have less time to wait to make money back on the home. The FHA is especially known for selling HUD homes for less than the average sales price in a given area. FHA foreclosures represent a fraction of HUD but they are still a significant number of homes and both should be considered.

VA (Veterans Administration) and HUD (Housing and Urban Development) have different and unique opportunities for the buyer. Both are often forgiven for the local taxes normally associated with the purchase of a home (this is on a county by county basis). Be sure to ask the local title company or escrow company to look into it for you before closing as this is often missed due to their are not used to dealing with the 2 to 3 percent of the market that VA and HUD foreclosures represent.

Foreclosure Listings Increasing

As the market settled after the mortgage meltdown foreclosure listings also settled and fewer homes were on the market with a placard reading “Bank Foreclosure” in big red lettering. This was a good thing for the entire real estate market. Having an abundance of foreclosures brings the entire market down and it makes it harder for home owners, who would like to move, to get the appropriate price for their home as a similar home down the same street was sold for substantially less and the appraiser is using the foreclosure as a comparable sale.

This is just one of the problems when there are too many foreclosure listings in any area. Another issue is the television set that sits in everyone’s living room harping about the price of homes based on the number of foreclosures and this constant barrage of negative information makes most people sit on the sidelines waiting for the market to either implode completely or to correct itself. Meanwhile while they wait, others are buying foreclosure listings and making great investments.

Whatever the reason, a market can only handle so many foreclosure listings at any given time. The more foreclosures, the lower the market gets and this is a lesson the banks that were foreclosing and selling off realized too late. The market and their investments would have been better off if there had not been a rush to divest themselves of the toxic assets made more toxic by their own actions.