These Overlooked Issues Can Become Deal-Killers For Your Mortgage ApplicationA mortgage loan approval is never final until it’s funded. And that means after you’ve signed the final paperwork and the bank has wired funds to escrow.

Mortgages are made up of many moving parts, any of which might “go wrong” while your home loan is underway.

Some are in your control, like deciding to purchase new items on credit during the mortgage process, many more are not. These “not in your control” items are the ones that you may not be thinking of.

Just being aware of some potential pitfalls could help save your loan down the road, and your peace of mind today.

What Many Mortgage Articles Don’t Say

Many mortgage related articles offer similar things like buying a car before closing, or opening a bunch of new credit cards, but there are  more uncommon factors that can lead to a similar loan turndown.

For example, a home not be able to get approved if it’s unsuitable, or unsafe, for human habitation — a condition you may not discover until after a thorough home inspection’s been made.

Broken windows, lack of plumbing, major electrical code violations and/or major foundation damage are all deal-breakers with a lender. 

You’ll either have to fix the home prior to your loan closing, or don’t close at all.

More Mortgage Pitfalls To Avoid

There are others ways in which a mortgage approval can go bad, too:

  • You’re self-employed and your income was declining over the years leading up to your mortgage application
  • Your tax return shows large amounts of unreimbursed employee expenses
  • You have switched lines ofwork or had unexplained breaks of employment in recent years

Mortgage approvals are delicate and, despite an improving economy, lenders still operate with caution. Talk with your real estate agent and your loan officer and put together a game plan.

The best way to beat the mortgage system is to know the rules before you start to play.

And the best way to know the rules is to speak with your trusted mortgage professional today!

Whatever You Do, Don'ty Make These Common Mortgage MistakesAre you applying for a mortgage on your home? Keep in mind that a mortgage is a major financial decision and choosing one will have a significant impact on the rest of your life.

Many people go into this decision without understanding all of the essential mortgage information they need to know. This means that they may not make the best choices which could result in paying much more than they need to.

If you want to save yourself from throwing away your hard earned money, here are a few common mistakes to avoid:

Trying To Time The Mortgage Interest Rate Market

Many people will wait too long to make a decision to lock in their mortgage rate, trying to wait until they think that the rates have hit bottom. However, unfortunately most of the time this leads them to wait too long and end up with a higher interest rate.

If you are waiting things out, keep a very close eye on the economic indicators. Better yet, your trusted mortgage professional would be a good source of information about the fluctuations of interest rates.

Forgetting About Closing Costs

In addition to saving up a down payment for your mortgage, don’t forget to factor in the closing costs. These can range from two percent all the way up to six percent of the value of your home.

Make sure that you have budgeted for this in advance, so that these fees don’t catch you by surprise.

Not Considering All Loan Options

There are many people out there who haven’t considered certain loan products, such as an adjustable rate mortgage, because they just don’t understand how they work. However, you might be missing out on an option that would really work well for you.

Make sure you do your research and gain an understanding of the loan options available to you.  Ask your loan officer for guidance in this area.

Looking At Just The Mortgage Rate

Remember that the mortgage interest rate is only one factor that you should consider when choosing a mortgage. Don’t forget to also consider the time frame of the mortgage closing, any restrictions on lump sum payments and any other important factors.

Following these steps will help you avoid a few of the common mistakes people make when choosing a mortgage. For more information about home buying and mortgages, you can contact your trusted mortgage professional today. 

What Should I Do If I Am Behind On My Mortgage Payments?What happens if you go through a tough financial period and you find yourself behind on your mortgage payments for your home?

If you are missing mortgage payments and are having difficulty paying, this can become a serious problem. Even just one missed payment can be difficult to catch up on, and if you are in this situation it is important to get help right away.

Contact Your Lender

The first step in this circumstance should be to get in touch with your mortgage lender to explain the situation. Simply leaving things alone and not explaining why you have missed a payment will just make things worse.

When people are struggling financially, they avoid calling their creditors for as long as they can. This is usually the wrong strategy to have if you want to make sure that you keep your home.

When you speak to the lender, you can explain why your payment is overdue. For example, perhaps you were laid off from your job or you have been sick and unable to work. If you have a good payment history and you are the one to initiate contact, the lender may be more likely to consider options for you to repay the mortgage.

Consider All Of Your Options

Is there a relative or a friend who could lend you enough money to pay off your missed mortgage payment? Could borrow from your insurance policy? Is there a way you can sell something that you are not using or cut back on other expenses?

Perhaps you could work a part time job on the side to earn more money. There are a number of ways that you could come up with the extra cash and make the mortgage payment.

However, be careful with payday loan companies or other short term lenders, as they may charge extremely high interest that can make it even more difficult to get out of debt later.

Loan Modification

In some circumstances, you might be able to arrange with your loan servicer to permanently change one or more of the terms of your mortgage contract so that your mortgage payments will be more manageable for you.

This could include reducing your interest rate, adding the missed payments to the loan balance or extending the term of the loan. A loan modification can be a good idea if you are facing a reduction in your income that will last for an extended period.

If you are struggling financially and you have missed a mortgage payment, don’t panic. Instead, follow these steps to make sure that you deal with the situation well and get back on track.

To find out more about getting a mortgage on your San Jose home, contact your trusted mortgage professional today.

3 Clever But Simple Ways to Get Your Home Mortgage Paid FasterPaying off the mortgage on your home faster means that you will not only have the satisfaction of owning your own home sooner, you will also have the benefit of paying much less in interest over the years.

The faster you pay off your mortgage, the more money you can save, so here are some tips to accelerate your payment schedule.

Pay Your Mortgage Every Other Week (Bi-Weekly)

Did you know that if you take your monthly mortgage payment and divide it in half and then pay it every two weeks that you will end up making a full extra month of payments every year? This is called a bi-weekly payment program which has been around for a long time, and it’s still a good idea today!

You likely won’t notice the difference since the extra half payments occur in long months with bigger paychecks, but over the years this will end up saving you thousands of dollars in interest payments.

Make a Bigger Monthly Payment

Similar to the bi-weekly payment plan above, you can accomplish the goal by dividing your principal and interest portion of your payment by 12 and then adding that amount to your regular monthly payment.  You will be paying that extra payment every year, but spacing it out over each monthly payment.  

Most homeowners using this tactic can shorten their term by up to seven years.

Put Any Windfall Toward the Mortgage

Was your tax rebate larger than you expected? Have you received an inheritance from your great aunt Thelma? Have you won a cash prize in a contest?

Put any unexpected chunks of cash straight toward your mortgage instead of spending them. This won’t affect your budget at all, because you were never expecting or counting on that money in the first place. But once again, it can make a huge difference in the overall amount of interest that you pay on your mortgage loan.

However, keep in mind your particular situation. Spending every last penny paying off your mortgage as quickly as possible might not be the best option for you if you have no emergency savings fund or if you have a credit card languishing with high interest debt.

It is usually more important to deal with these pressing financial issues before attempting to save money on your mortgage.

One great way to start your research on how to pay your San Jose home off faster is to talk with your trusted mortgage professional.  They can answer your questions and point you in the best direction for your situation.

3 Critical Tips To Improve Your Credit Score And Mortgage TermsWhen you are looking for a mortgage for your home, your credit score is very important. Any potential lender will check your score and will use the number to assess your creditworthiness and the interest rate that they offer you.

The better your credit score the lower the mortgage interest rates will be available to you, as the lender will be able to see that you can handle credit well.

However, if you have a very bad credit score, it could be causing you to be offered high interest rates on your mortgage that could cost you thousands over the years.

Improving your credit score before searching for a mortgage will ensure that you get the best rate possible. But what can you do to improve your credit score?

Here are three tips that can help you improve your credit score and your mortgage loan:

Be Patient

Remember that improving your bad credit will be a little bit like losing weight. You might not see results right away but it is the long term benefit of your good habits that will make all the difference.

When it comes to all of the ways to improve your credit score, there are no quick-fixes and the best way to rebuild your credit is to be responsible over time.

Check Your Credit Report For Errors

If you don’t know precisely what your credit score currently is, the first step will be for you to obtain a credit report. You can request a free copy of your credit report and check it over carefully for errors. There might be an error on the report that is making your score appear worse than it should be.

Set Up Payment Reminders

If you have trouble remembering to make your credit payments by the due date, this can be one of the biggest negative factors bringing down your score. You can ask your bank to set up convenient reminders through the online banking portals so that you will receive an email or a text whenever your payments are due.

Your credit score is very important when looking for a San Jose home mortgage, as it will mean that you receive much better program options and interest rates. Keep these tips in mind so that you can enjoy the best rates possible on your mortgage.

For more tips on how to improve your prospects for the best mortgage, feel free to contact your local, trusted mortgage professional.