Ways to Get the Funds You Need for Your Mortgage

Paying the mortgage can be a difficult task, especially when you've had a change in your job situation or if the taxes on your property keep going up.

Thus, you might have found yourself in a situation where you need to get extra funds for your mortgage. Fortunately, you have plenty of options to pursue.

Check for Cash Rewards

When you're a little bit short on cash and need a short-term solution for this month only, see if you have any cash rewards available that you aren't currently using. 

For example, you might have a credit card that offers cash rewards. Check to see if you can cash out on those rewards. Then, you can put that money toward your mortgage. 

Do note that credit card rewards tend to take some time to build, so this solution isn't a useful long-term plan.

Research Relief Plans

Many people aren't using certain benefits that they are entitled to. For example, in the event that you are suffering from the long-term effects of a disease or if you are experiencing struggles with a disability, you might be entitled to compensation or other forms of financial relief. 

Researching programs specific to your needs can help you to find the money necessary to pay the mortgage both now and in the future.

Call Your Mortgage Provider

Sometimes, situations arise where you don't have too many options for getting the money in right now. Thus, you might be tempted to simply ignore the bills. Instead of allowing the problem to grow worse, call your mortgage lender. 

Let the representative know what is going on and when you expect to be able to pay your bill again. The lending company may be able to work out an agreement with you. Do keep in mind that the mortgage may accrue more interest as a result.

Refinance Your Mortgage

While you might have the necessary money to pay the base mortgage, you may be struggling with the interest rate. Looking into refinancing is a smart way to reduce the amount of money you have to pay every month. 

Check into the current interest rates in the area. In fact, if you have equity in your home, you might be able to refinance with cash out, which means you'll have some extra money in the bank. 

You can look to companies like Fairway PNW to find lenders that are willing to work with your needs.

Staring at a mortgage bill while not knowing how to pay it is a frightening experience. Fortunately, help is available if you’re willing to reach out to others for it, or get creative in your methods of getting the necessary funds as quickly as possible. 

Don’t be afraid to seek out cash where you can find it, like from cash rewards you’ve earned. Also, don’t be afraid to get in contact with the people you owe the money to. 

Keeping them informed may make them more lenient or at the very least willing to work with you, as opposed to simply saying nothing and allowing your bills to go unpaid.

What Do You Need To Get Approved For A Home Loan?

Now that you have found the home of your dreams and are ready to buy rather than continue paying rent to a landlord month after month, it's time to start crunching the numbers.

Since you're going to need a substantial loan to make your purchase a reality, it is important you do your homework beforehand to ensure the loan process goes as smooth as possible.

As you're preparing to seek a loan to buy a home, here are some things you'll need to get approved by your lender.

Proof of Income

Before any bank or other lender gives you a loan to buy a home, they want to make sure you are actually making enough money to pay back the loan. 

Therefore, you will need to produce proof of your income prior to getting loan approval. In most cases, this means recent pay stubs, W-2 forms from the past two years, and possibly tax returns from the previous two years as well.

Good Credit

While in some circumstances it is possible to obtain a home loan with less than perfect credit, the majority of lenders require loan applicants to have good credit. 

While you should be able to get a loan with a credit score of at least 620, the lowest interest rates often go to those applicants whose credit scores are 760 or higher.

Employment Verification

While your pay stubs and W-2 forms may show you are employed, many lenders take things a step further to verify your employment status. Therefore, expect your lender to call your employer to verify your employment and the amount of your salary. 

If you have changed jobs just prior to applying for your loan, the lender will likely call both your previous and current employer to get the information they need.

Driver's License and Social Security Number

Even if you tell your lender your credit rating is good, they won't simply take your word for it. Instead, they will want to pull a credit report on their own so they can look it over before deciding the fate of your loan request. 

To do this, the lender will need to copy your driver's license and have your Social Security number. If you object to providing this information, chances are your loan application will be denied.

Since you want to do all you can to make sure your loan application is approved, taking the time to gather together the paperwork required by your lender may pay off in you soon moving into your dream home.

Top 5 Reasons to Refinance Your Home

Homeowners should consider refinancing their homes if they look to save money on their mortgage or obtain a lower interest rate. There are many reasons people choose to refinance, but the most common ones include paying off debts faster, consolidating debt into one loan with one monthly payment, and unlocking the equity in your home.

Refinancing can also be beneficial for homeowners who want to take advantage of recent changes in tax law by deducting some of the costs associated with refinancing. This blog post will cover 5 reasons why homeowners should consider refinancing their homes.

Save Money on Your Mortgage Interest

One of the biggest benefits of refinancing is that you can save money on your monthly interest rates. Refinancing allows you to get a lower interest rate, which in turn lowers your mortgage payment, allowing you to have more money in your pocket each month. 

Your credit and financial history will be considered when determining if you qualify for a refinance loan and what types of terms and rates are offered. Before applying for refinancing, the homeowner must have all their information together including making sure they don't have any late payments or taxes owed. 

It's also helpful if the homeowner knows how much equity they currently have to discuss options with their lender at the time of application.

Pay Off Debit and Credit Cards Faster

Refinancing your home can help pay off debt more quickly by allowing you to combine multiple debts in to one low monthly payment. 

For example, if the homeowner has a $200,000 mortgage and $10,000 of credit card bills, they can refinance their existing loan and apply any savings towards paying off these debts. 

This is especially beneficial for homeowners who have good credit and stable jobs that will allow them to keep up with payments on their new loans. Suppose the homeowner decides that refinancing isn't right for them. 

In that case, there are other options available, including consolidating your debt into one loan with just one monthly payment or creating a "debt snowball", which allows you to slowly pay off all your debt in order of interest rate.

Uncover Equity in Your Home

Some homeowners are also able to refinance to unlock equity in their homes. This is common for homeowners who have lived in the same house for years and watched home values increase over time. 

To renew their mortgage, these homeowners can use some or all of this equity that has built up over time to help them afford a lower monthly payment without refinancing their entire loan amount. 

Refinancing can be lucrative if you're planning on moving out soon because it may be beneficial to go through the process, even if just for the cash savings alone. Home refinance loan rates are lower than mortgage rates which means you could receive a larger sum of money in your pocket.

Take Advantage of Tax Deductions

Homeowners who have been paying off their current mortgage for years may find that they are in a better position to take advantage of recent changes in tax law that allow you to deduct some of the costs associated with refinancing your home. 

For example, homeowners who have paid off their old mortgage and refinance into a 30-year fixed-rate loan can claim a deduction on any points charged when refinancing. Alternatively, suppose the homeowner has an adjustable-rate or interest-only payment mortgage. 

In that case, they could receive tax deductions for the difference between what is considered "true interest" and what was reported to the borrower's lender by their broker/lender.

Improve Your Credit Score

Homeowners who have good credit will also benefit from refinancing their loans because it allows them to take advantage of lower interest rates, improving their credit score over time. 

A homeowners' FICO score is important when obtaining mortgages, refinancing loans, and applying for other types of financing. Hence, it benefits the homeowner to keep an eye on this number and make improvements along the way. 

If your score isn't as high as it could be, but you feel like you've done everything possible (like making on-time payments), look into refinancing your loan – especially if there is money involved. 

Keep in mind that improving your credit score is a long-term investment that pays off over time.

In conclusion, the housing market is in a state of flux, and many homeowners are looking for ways to make their homes more valuable. 

If you're struggling to make your mortgage payments or think the time has come to trade up, take a look at refinancing your loan. You may discover that it offers benefits you never imagined when you first purchased your home. 

When thinking about changes in the real estate market, it's important to remember that there are also financial benefits available by refinancing a current loan, including lowering monthly costs and improving credit scores over time.

How to Save Money on Your Mortgage

As a pathway to property ownership and the financial freedom that comes with it, a mortgage is something that requires a decent amount of time to decide on. 

Considering that mortgages last decades and take a lot of money every month, knowing how to save money on your mortgage can improve your financial circumstances even more in the years to come. Here are some tips to help you save where you can with your mortgage.

Pay It Down

This particular tactic relies on the structure of the mortgage itself. Some mortgages let you pay extra helping you reduce the principal. This lowers your payments over time as you pay to put more towards your principal rather than just paying interest. 

However, if there are prepayment penalties, this can be a risky proposition. Also, if interest rates in savings accounts, money markets, certificates of deposit, or other investment opportunities are higher than your mortgage rate, you will likely make more money, in the long run, saving your extra cash before paying the mortgage.

Refinance the Mortgage

Mortgage refinancing is something you should at least look into once every couple of years. This gives you a chance to see the current options and interest rates and essentially shop around. 

If you can lock in a lower interest rate than what you have right now, then you'll certainly save money on the life of the loan. You also might be able to refinance your mortgage over a longer span of time to lower your monthly payments.

Don't Pay It Alone

Are you personally alone responsible for paying the mortgage on your home? If you were single when you started your mortgage but now have a romantic partner living with you, then you should realistically expect them to contribute something to the roof over their head if they aren't already. 

Another option is to rent out part of the home or just a room or two. Whether it's just a single bedroom or a basement apartment, you can generate hundreds of dollars in passive income which helps you pay things off more quickly.

Saving Money on Your Mortgage Is Possible

A mortgage might feel like a lifetime commitment, and it is a huge monthly commitment that takes decades to pay off. However, some mortgages can be paid down early without penalty, refinancing options might make things more manageable, and you don't have to always do it alone. Find the options that work for your home to save money in the long run on your mortgage.

3 Reasons to Get a Home Loan

When it comes time to buy a house, most buyers will have to resort to a home loan. Although it may be tempting to save up and pay for a house in cash, getting a traditional mortgage is a better option for the overwhelming majority of consumers.

Here are three reasons you should consider getting a home loan when you buy real estate.

You'll Be Able to Buy Much Sooner

The most obvious advantage of a home loan is that it will allow you to buy and move into your new house much sooner. For all but the highest income earners, saving to pay for a house in cash can take years or even decades.

During that time, you'll have to continue paying rent that could otherwise be spent making payments on a home of your own. In almost all circumstances, the ability to buy quickly and begin building equity in your own property makes a home loan a much better solution than saving to pay for a house out of pocket.

Your Money Can Work Harder

Even if you have enough saved to buy a house without a mortgage, there's still a fairly strong argument in favor of home loans. Mortgage rates, particularly these days, are very low.

When compared to the historical average of the stock market, you'll actually come out ahead by investing your money while paying a much lower rate of interest on your mortgage.

While it may seem counterintuitive, your money will actually work harder when you invest it than when you save it to put toward a home.

Home Loans Provide Protection Against Inflation

As recent experience has proven, high inflation can quickly eat away at your savings. This can be a serious problem when you're saving toward a purchase as large as a house.

When you take out a loan, though, your payments are determined at the outset. This means that even during periods of higher inflation, you can predict what you'll have to spend and not have to worry about your payments rising.

It should be noted, though, that it only applies to fixed-rate loans. If you take on a home loan with a variable interest rate, you could see your payments increase if interest rates rise.

As you can see, there are many good reasons to finance your home purchase with a loan. While there are exceptions to every financial rule, the vast majority of home buyers are better off using home loans than trying to save and pay for their new homes out of pocket.

How to Prepare to Buy Your Home

The road to homeownership isn't an easy one. The earlier you start preparing for it though, the better of an experience you’re likely to have. You can take the following steps to prepare for buying a home.

Check Your Credit

You don't want to start your home buying journey until you have checked your credit. The first thing that you should look for on your credit report is errors. 

One error can cause your credit score to drop by several points, and it can make the difference between good or bad credit. Contact the credit bureaus to get the errors fixed as soon as you can.

Paying off debts is another way that you can add points to your credit score. It is also a good idea for you to avoid opening up new credit accounts while you are looking for a home.

Save Up Money for a Down Payment

How much money you end up paying for a down payment depends largely on the asking price and what type of mortgage you get. People often end up paying about 5 to 6 percent of their down payment, but again it all depends on the type of mortgage or loan. 

Your income should also be a factor, as it will help you determine how much you can afford to pay month by month.

To avoid Private Mortgage Insurance, you’ll have to put down 20 percent, and some might see this as a favorable option if they want to avoid extra fees and payments every month. 

How much you end up paying on a PMI will largely depend on things like your credit score, the size of the loan, and how much the down payment was. 

You can also get a loan through the Federal Housing Administration, which will allow you to get a lower down payment. Regardless of what option you choose, you need to start saving up money now.

Hire a Real Estate Agent

You need a real estate agent to help you get through this process, as they’re the best person to help you find what you’re looking for. They also have a lot of knowledge about the real estate market in general. 

Additionally, they can help you understand important terms, such as conveyancing, which is the transfer of a title or deed from one party to another.

Real estate agents are known for having great negotiation skills. You may be able to take thousands of dollars off the asking price of the home you’re looking at by working with a real estate agent.

Take a Home Buyer Course

You can learn a lot from your real estate agent. However, it is still a good idea for you to take a home buyer course to give yourself a leg up in understanding the market. 

The course can give you general information about buying a home and help better prepare you for when you’re looking. They can also give you budgeting tips that will help you afford your home.

The process of buying a home can be a lengthy one. You can get this journey started by checking your credit and saving up money for a down payment. It is also a good idea for you to hire a real estate agent who can help you with this process. Furthermore, you can take a home buyer course.

What to Look for When Finding a Lender for Your Home

When you are preparing to buy a home, obtaining financing may be one of your biggest obstacles. Depending on the price of your home, your financial situation both past and present, and the economic conditions in your community and across the nation, the process can sometimes be more difficult than you imagined. 

To avoid wasting your time and ultimately being disappointed at not getting a loan, here are some things to look for when seeking a lender for your home.

First-Time Homebuyer Programs

If this is the first home you are buying, look for lenders who offer programs for first-time homebuyers. This is especially important if you are a military veteran, first responder, or even someone who has a student loan since many lenders offer loan and grant options with such features as down payment assistance, lower interest rates, and more.

Transparency and Communication

Since even the slightest mistake or misunderstanding could result in you not being able to purchase a home you've been looking at for some time, always choose a lender that emphasizes transparency and clear communication throughout the process. 

This is always important when private equity representation is being used in conjunction with a real estate purchase since consultants can meet directly with you, learn all details of the potential project, and give you the information needed to make a well-informed decision.

Competitive Interest Rates and Costs

Just as you should not fall in love with a property, you also should not fall in love with a certain lender. Instead, be willing to take a look at numerous lenders, both brick-and-mortar and online companies, to gauge their competitiveness regarding interest rates being offered to home buyers. 

However, don't stop there. Instead, take a close look at the fees associated with your loan application, appraisal, title, and loan origination, all of which will ultimately affect your closing costs.

Compare Options for Pre Approval

Finally, compare any options for a preapproval from a multitude of lenders. For example, see if your lender allows the preapproval process to be handled exclusively online, or if you will be required to make an in-person visit. 

Also, if your credit score is lower or you have other issues, ask your lender to work with you toward a solution. In many cases, lenders will be willing to look at your whole financial picture and any extenuating circumstances in making their decision.

Rather than rushing through the lending process and winding up with a bad deal or no deal at all, take your time and make sure the lender you choose to work with is able and willing to help you from start to finish.

5 Reasons You Might Not Qualify for a Home Loan

Now that you have found your dream home, you thought qualifying for a home loan would be the easy part. However, this may not be the case. 

Although lenders are generally more eager now than in past years to approve mortgage loans, there are some instances where you may be denied the loan needed to purchase a home. 

Should you be preparing to apply for a home loan, here are some of the most common reasons why you may be turned down.

Poor Credit History

If you have had past credit problems, your poor credit history may be the reason your loan application was denied. Since a lender wants to make sure you are not a high-risk applicant, any problems with foreclosures, bankruptcies, or credit cards could be reason enough to deny your claim. Generally, if your FICO score is under 620, your loan will be denied.

Income/Asset Documentation

Even if you think you have enough money to make a monthly mortgage payment, your lender may not think so, especially if you are unable to provide sufficient documentation regarding your income to debt ratio. 

Should questions arise about this or other related areas, private equity representation may be what's needed to let everyone make a well-informed lending decision.

Very Small Down Payment

If you put down a minimal down payment on your new home, the lender will view you as a high-risk applicant, and thus may deny your loan. If possible, try to put down as much as 25% of the home's price as a down payment, since this will almost guarantee approval.

Issues with the Property

If your new home is appraised at an amount that is far less than the amount of the mortgage loan, your lender may deny your application. While you can get a second appraisal, your best option is to shop around for other lenders.

Limited Employment History

Should you possess a limited employment history or have one where you have changed jobs frequently, this can be used against you by your lender to deny the home loan. 

In most cases, a lender will want you to have at least two years of consistent employment with your current employer prior to approving your loan.

If you have had your home loan application denied, don't give up. By seeking out other lenders and making improvements where you can, it is quite possible you may still get the loan needed to purchase your dream home.

Looking to Buy a House? Choose a Home Loan That Is Right for You

Purchasing a home can be a very overwhelming process. One of the more intimidating parts of the process is determining what kind of home loan is right for you. This article will break down some of the types of loans available to you and hopefully help you choose the one that is right for you.

Non-conventional vs. Conventional Loans

The two main types of home loans available are government, also called non-conventional loans, and conventional loans. Whether or not you should choose a non-conventional or conventional loan depends on many factors including eligibility and your personal financial situation.

A home loan broker can help you explore all of your options, find the loans you may be eligible for, and help guide you through the application and approval process. Be sure to find an experienced professional that can help you make the right decisions.

Non-conventional Loans

Government loans are easier to qualify for because they are backed by the government, and should you be unable to pay back the loan, the government will make sure the lender’s loss is covered. 

Common types of non-conventional government loans are Veterans Administration (VA) loans, Federal Housing Authority (FHA) loans, and U.S. Department of Agriculture (USDA) loans. 

Government loans are generally easier to qualify for because they have less strict requirements in terms of credit score and require less of a down payment than conventional loans do.

Conventional Loans

Conventional loans are somewhat harder to qualify for than government loans but are overall less costly. Conventional loans can either have a fixed interest rate that stays the same throughout the life of the mortgage or an adjustable interest rate in which the interest rate can fluctuate over time. 

Most often, people opt for a 30-year fixed-rate loan because the payment is generally most affordable. There are also fewer common types of conventional loans like renovation loans, balloon loans, bridge loans, equity loans, and reverse mortgages. 

A home loan broker can help you look over your options, determine what you may qualify for, and help you decide what kind of conventional loan is best for your situation. You may end up paying unnecessary costs if you decide to choose a loan without the help of a broker.

To conclude, there are several types of home loans available to home buyers. It is important to be aware of your particular financial situation and goals to determine which kind is right for you. If you need assistance, home loan brokers are a great resource to help analyze your situation and guide you through the process of obtaining the mortgage that is right for you.

Choosing the Best Lender for an FHA Streamline Refinance

Finding the ideal FHA mortgage lender is not as effortless as it sounds. First off, you need to narrow down your choices to come up with an approved list of lenders from the Federal Housing Administration because not every lender offers these kinds of loans. Also, check their current fha streamline rates and the amount of money you stand to save by opting for an FHA Streamline refinance.

In this post, we discuss a few tips that will help you search for the ideal FHA mortgage lender.

1. Know your credit score

It is crucial to note that FHA seeks borrowers with a credit score of at least 500. However, if you desire to get an FHA loan but have a down payment of 3.5%, you will require a credit score of 580 and above.

For FHA Streamline Refinance, appraisals are unnecessary. Your Loan-to-Value-Ratio is calculated based on the last appraised value when you received the current loan.

In some instances, an appraisal, however, may be required.

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Also, to assess the prevailing mortgage rates, you need to request the most current rate quote by completing a rate quote request from the lender. Interestingly, you will discover that they have the same rates or even lower compared to other FHA programs.

2. Shop around for more than one FHA lender

FHA mortgage rates may be all over the place, and for this reason, you need to do thorough research to ensure that you settle or the best mortgage rates. Some lenders may offer lenient terms compared to others. Or may qualify you for an FHA mortgage loan faster compared to others.

Remember, lenders often price their mortgage loans vis-à-vis the prevailing marketing conditions. And also mark up their interest rates as a result of profit targets and business costs.

Figure out the difference between lender fees and FHA mortgage insurance premiums

To cater to the loan default costs, FHA-backed loans need mortgage insurance. FHA mortgage insurance is similar. You will be required to pay uniform premiums at lender one as you will at credit union two. Lender fees are dissimilar from lender to lender. That makes it effortless to compare the fees and terms on offer for each lender.

3. Look out for the APR

Another way to figure out how much fees is required is to compare the annual percentage rates of varying lenders. They will always make money by charging you different fees such as application fees, processing, and origination fees. And or through building their profits into the interest rates you pay.

That is why you need to factor in your payment interest rates plus the fees included APR. You may use the calculator provided on various lender sites to help you assess the difference between annual percentage rates and interest rates.

4. Customer service

When choosing the best lender for an FHA streamline refinance, you want to ensure that they exhibit exceptional customer service. Choose a lender who responds to phone calls, messages, emails, and other communication channels on time or reaches out to you as soon as they can.

You want to ensure that the staff are polite and show concern for their clients.

5. Stellar reviews

Before settling for a lender for an FHA streamline refinance, you need to ensure that they have a good name. You can find out how clients perceive their services by checking their comments on social media platforms, the company's website, Google, and other equally helpful avenues.

The ideal FHA streamline refinance lender offers exceptional services to their clients, alongside reasonable interest rates. You want to steer away from FHA streamlines that have an unpleasant history. And those with bad reviews on their platforms.

You may also consider recommendations from trusted family members, relatives, and friends of FHA streamline refinance lenders they have worked with before. And would vouch for their services.

You also want to ensure that you are working with award-winning experts whose primary aim is to provide their customers with the best rate quotes.

Loans and Lending: How to Get Financing for Your New Home

As the housing market gets tighter, traditional lenders may not have enough flexibility to offer you the money you need in the timeframe you need. Thankfully, there are many private borrowers and FHA alternatives that you can use to fund your house.

New or Existing?

Are you building new or buying an existing home? If you’re buying an existing home that needs some work, you may be able to get short-term lending for the initial purchase, make the repairs to bring the house up to what you need, and then qualify for a traditional mortgage. 

It’s important to be aware that the terms on short term lending can be a bit more expensive than a traditional mortgage. However, you can get the money much more quickly and those dollars will be easier to get approved than a traditional mortgage.

Get Pre-Approved

If you’re working with a realtor, get your documentation together so you can get preapproved for a mortgage with a mortgage broker and have a working idea of the dollars you can qualify for. 

Most of these pre-approvals are what is known as a “soft pull” or a loan approval that doesn’t impact your credit. While talking to the mortgage broker, be prepared to ask about first-time buyer options or down payment loans. There are programs available in some regions that allow you to

• Borrow enough to meet the down payment requirement
• Make payments for a set period of time, both the down payment loan and the mortgage
• Get the remainder of the down payment loan forgiven

Functionally, the down payment loan becomes a grant once you’ve been in the house for a particular number of months or years.

Credit Rating

For those that are planning to build, be very careful with your spending and payment habits once you’re preapproved. You want your credit rating to be as high as it was at the time of preapproval, and higher is even better. 

If you’re building, you may need to re-qualify for the loan in the event of construction delays.

It’s been a very uncertain couple of years and the housing market is very tight. If you find a neighborhood and a home that suits you well, you may have to make a couple of different applications to get fully funded for your region. Keep going so you have dollars in place when you’re ready to shop.

What You Need to Know About Getting Pre-Approved for a Mortgage

If you've decided that you want to own a house, then you're likely going to need a mortgage. At first, these may seem like a complex financial obstacle. However, learning more about what you need to get pre-approved for a mortgage can assist in easing your feelings regarding the subject.

Your Credit Score Makes All The Difference

When it comes to getting pre-approved for a mortgage, your credit score is the deciding factor. It will determine if you get approved and what your interest rate will be. For credit scores below the 650s, you're going to have trouble getting approved. 

You may need to apply for a special program such as an FHA mortgage where lower credit scores are accepted. On average, a 720 credit score will qualify you for some of the best mortgage rates out there.

They're Going To Need Documentation

It's a good idea to round up your documentation ahead of time so you can submit it to the mortgage lender right away. In the pre-approval process as well as the homebuying process, gathering documentation tends to take the longest part. 

By having your documents gathered, you can easily submit it to get your mortgage loans approved quickly. Some example documents you'll need are your last two pay stubs, past two years tax returns, and last two years of W2s.

You'll Need Steady Employment

Lenders want to ensure that they're putting their money into a great mortgage investment. They know that part of what makes a great investment is lending money to people who have steady employment. 

Most lenders look for people who have been employed at the same business for at least two full years. This shows them that the person is bringing home a reliable paycheck to pay their monthly mortgage payment.

Pre-Approval Isn't A Guarantee

It's important to note that a pre-approval doesn't mean that you'll definitely be given the loan. It simply means that the lender has briefly looked at your file and knows that you meet the minimum qualification standards that they require. Once you get a house under contract, the lender may choose to not fund the purchase for a variety of reasons.

When it comes to getting pre-approved for a mortgage, there's a lot that goes into it. Understanding what you'll need prior to applying can help ensure that you don't get turned down for unavoidable reasons. The above are four of the major components that you should understand before ever applying for a mortgage loan.

From a Building to a Home—Staying Financially on Track While Buying a House

Becoming a homeowner is an exciting yet daunting undertaking. However, great rewards invariably accompany great risks. If you’re gearing up to purchase a home and are looking for insight on how to remain financially stable, consider these expert tips.

Monitor Your Credit Score

Nothing will prove more stressful than watching your credit score decline while affairs are underway. What’s more, you’re likely to get hit with a higher interest rate if your finances aren’t in good standing. With that said, make it a point to track your credit score. 

Obtaining this information is exceedingly simple, and in this instance, ignorance certainly isn’t bliss. Most importantly, it’s crucial to go over your credit report with a fine-tooth comb; that way, you’ll be able to pinpoint any inaccuracies.

Consult with a Lender

You’ll want to forge an intimate relationship with your lender. In addition to offering sound financial advice, they also oversee your monthly payments. Should you have questions or concerns, they’ll be able to address them. 



Mortgage programs are inherently complex, but with assistance from a professional, all information will be rendered into layman’s terms.

Save

While this pointer may seem obvious, the importance of saving can’t be stressed enough. If you fail to save, you’ll inevitably wind up in a sticky situation. Unexpected fees are a part of the process, and in order to be financially prepared, saving is vital. 

Moreover, if you’re looking to lower your monthly payments, a larger down payment is required. In short, having a fair amount of money to lean on bodes well for a stress-free experience.

Pay Your Bills on Time

Nothing will compound your anxiety quicker than having charges pile up. You’ll also sully your reputation with your lender if you fall behind on payments. In essence, you need to account for any recurring charges. 

Lenders can be rather unforgiving, so if you drop the ball even once, it can be difficult to get back on track. If you don’t consider yourself a financial expert, enlist the help of a trusted advisor. There’s no shame in seeking guidance, and you’ll gain both knowledge and peace of mind by doing so.

It’s not uncommon for budding homeowners to wonder if their finances will soon hang in the balance. If you resonate with this notion, avail yourself of the above advice. As a result, you’ll maintain financial security while buying a home.

Tax Implications on a Second Home Loan: A Must Read

With India’s economic growth and so many affordable housing options, you can buy more than one property. Gone are the days when one would save all their money to buy one house and stay there forever. Real estate companies are acquiring land and building apartments that are accessible to all.

You also do not have to invest all your savings to buy another house. With easy home loans and affordable home loan interest rates, even you can buy a second home. Plus, tax benefits on second home loan make this even more attractive. The tax benefits work in India but not in all countries, there is information on the Australian system here.

Tax Benefits on Second Home Loan

The tax applicable to the owner of a second home is variable. The three variations are:

1. One house is on rent.
2. Both houses are on rent.
3. None are on rent.

According to the tax laws, when you are the owner of many properties only one house is considered to be self-occupied. Self-occupied means:

1. The owner stays in the property.
2. The property is not given on rent.
3. You get no income from the property. This is also called ‘deemed rented out’.

You can choose to show any of the properties as self-occupied. It does not have to be the first property you had bought. The others will be considered for rent out options.

If the house is on joint ownership, the rent should be split as per the percentage share of the owners. The income from the rented-out property is considered for the actual income tax calculation. This could be either from one house or both.

Tax on Self-occupied House

Say, you have bought a property that has been fully constructed within five years of your taking the loan. What is the home loan tax benefit available to you? In such a case, up to Rs.2 lakh will be exempted from the actual interest paid. 

But, if you are a senior citizen, then the limit is extended to Rs.3 lakh. If the house was not completed in five years, then the exemption limit is Rs.30,000. You can even avail of an exemption of Rs.50,000 for properties whose loans were below Rs.35 lakh. Companies offer home loans up to Rs.5 crore and top-up loans up to Rs.1.75 crore.



Suppose your first home is not occupied by you or you have rented it out and you are still paying the home loan. Then, the actual principal repaid will be applicable for tax exemption with a cap of Rs.1.5 lakh. You can avail of this exemption even on repayment of the loan amount.

Tax on Second Home

The interest paid on the other properties has an exemption limit of up to Rs.2 lakh. There will be no tax exemption on the principal amount repaid if you have taken a second home loan.

Also, the second home is considered wealth. Thus, an extra 1% tax will be applicable if the price is above Rs.30 lakh.

The income from the rent earned on the second home will be taxable. You can deduct the municipal taxes or the maintenance charges on the house to calculate the final income. A standard 30% deduction on rented income is also allowed. 

So, the final taxable income on the rented property will be the actual amount received minus the taxes, 30% deduction, and interest paid on it.

If the property is not let out and remains vacant you can consider market rate prevalent for calculating the income.

Summing Up

Sometimes, the second home may actually impact your return on investment. This happens if the interest rates are high and the property prices have increased. Thus, you need to be smart to know when to invest money. So, keep an eye on property prices and avail of the best home loan interest rate.

How to Finance the Purchase of a New Home

Buying a new home can be one of life’s most amazing experiences. It can be a little intimidating for people who are unsure of how they’ll finance it, however. Homes are enormous purchases. If you’re in the latter group, there are certain suggestions you should run through your mind. Financing a new home is without a doubt something you can do.

Research Home Loans

The smartest home buyers are the people who prepare efficiently. That’s why you should take the time to research the massive and often overwhelming universe of home loans. 

Your aim should be to get your hands on a great interest rate. It should also be to get your hands on a deal that won’t negatively interfere with your lifestyle and comfort level, too.

Set up a Consultation with a Reputable Mortgage Broker

Mortgage brokers can be major sources of help for people who are looking to finance new residential properties. They can help people secure mortgage deals that are a lot more desirable. 

If you want to save a lot on your mortgage, you can’t top the guidance of a knowledgeable and seasoned mortgage broker. Mortgage brokers can simplify the process of finding the most ideal deal out there.

Save Up

Covering down payments can cost people hefty sums of money. If you want to finance your home easily and with confidence, you should begin saving up to handle your down payment well in advance. 

The more money you initially put down, the easier it will be for you to manage your mortgage expenses on a monthly basis. You should always think about the big picture.

Assess All Offers Meticulously

You should never even think about being careless about home loan offers. Don’t assume that they’re all similar. You should evaluate your home loan offers meticulously, and prior to making any commitments. 

It can be unpleasant to commit to a loan only to realize that there were actually much better options out there simply waiting for you. If you give yourself a lot of time to make a solid decision, you should be good to go. Try to find out about as many loan offers as possible. Be as exhaustive as you need to be.

New home financing can seem pretty scary to people who are unfamiliar with the process. If you’re committed and detailed, however, you should be able to do extremely well for yourself. You should aim to be calm, composed, and confident.

Home Loan Eligibility Calculator - Get the Best Lender with It

Most of the people who don’t have the required funds to purchase their homes depend on a housing loan to fund it. However, applying for a Home Loan in your city without determining your Home Loan eligibility can lead to a rejection. As a result, qualifying for a Housing Loan becomes a must. 

Let the Home Loan eligibility Calculator Help You

Prominent names in the House Loan financial industry have made an online tool known as the Home Loan eligibility calculator available for customers. You can use the eligibility calculator to quickly know your loan eligibility or the amount that you can borrow.

The Home Loan eligibility calculator works when you provide your age, all types of income, existing liabilities and the desired repayment tenor.

As soon as you enter these details in the calculator, you get to know an amount that you can avail as a housing loan after meeting other terms and conditions of the lender.

However, sometimes you may not be qualified enough to avail a desired Home Loan amount and will need some tips to increase your Home Loan eligibility.

Here are some quick tips to help you qualify for a larger housing loan amount:

Extend the Tenor of your Housing Loan

Want to increase the Home Loan amount that you wish to seek? Apply for the maximum tenor available with the lender to boost your eligibility. 



What’s more, extending the loan repayment into a wider tenor will also be affordable for you. Like this, you can pay smaller EMIs and never feel the burden of paying a loan.

Ensure to Pay off all Previous Debts

When you can pay off all existing debts before applying for a Home Loan, you can also free up all such figures to make way for the Home Loan EMIs or the repayments. 

Lenders may not approve your loan request if they see you already have too many obligations to clear as they may consider you as risks.

Club Income of your Family Members

Are you getting a Home Loan lower than what you desired which may not suffice a good home purchase? You can combine income of your family members such as spouse and more to increase your eligibility for a higher loan amount. 

Also, clubbing the income of your family members who have a higher CIBIL Score can also help you avail a loan at lower rates.

Don’t Forget to Include Perks and Bonus

Did you know that including other sources of income such as yearly bonus while calculating your loan eligibility can also help you qualify for a higher amount? 

Don’t forget to add your annual performance bonus and other incomes to get an approval for a higher amount.

A Quick Look at Home Loan Eligibility Conditions

You can qualify for an upcoming housing loan if you meet the below standard housing loan eligibility criteria:

• A Home Loan borrower needs to be a citizen of India 
• His/her age should be under the bracket of 23-58 years 
• He/she should be a salaried profession with work expertise of at least 3 years 
• The minimum loan amount that one can avail is Rs.20 lakh, and the maximum limit is Rs.20 lakh. 

Documents Required for Home Loans

You will also need to furnish some documents required for Home Loan to qualify for a loan application such as:

• KYC documents 
• Address proofs
• Identity proofs
• Recent photograph 
• Latest Salary Slips or Form 16 
• Last 6 months’ bank account statements 

The Bottom Line

Since you are now aware of the tips that can help you boost your eligibility for a Home Loan, implement it in practice and avail a Home Loan of your choice. All the best!