The Dream of Homeownership: Mortgage Reality

Buying a home is the dream of millions of people. Being able to repaint the walls and redesign the kitchen seems small to some but to others, it is an act of pride. As people begin to look at the possibility of buying a home, they should be aware of mortgages and how they can protect themselves from predatory lending.

Applying for a mortgage can be stressful and unnerving. A lot of people don’t know what to expect when they are applying for a mortgage for the first time. There are others that have bought a home before and want to purchase a new one. No matter the situation, the process is similar. All applicants will have their credit inspected, their income verified and several other things. Once a decision has been made, everyone will receive the news that they have been approved or denied.

What most people should do is take the time to prepare themselves for their journey.

Simple Tips to Un-Complicate the Process

There are pitfalls that can happen when one decides to purchase a home. There are also tips to help keep these errors to a minimum. These tips are things that should be done by every potential homebuyer.

What’s Your Credit Score- Everyone that wants to purchase a home should know their credit score. Knowing their credit score will help people avoid being taken advantage of by predatory lenders. Many of these lenders think nothing of telling their potential clients their credit score is lower than it actually is. They do this so they can get away with attaching a higher interest rate to the mortgage. When potential homebuyers know their credit score, they know what interest rate they can qualify for and won’t accept higher.

Pre-Approval is Best- Those that take the time to get pre-approved for their mortgage will have a better chance of buying the home of their dreams on a budget they can afford. Getting caught up in the magic of buying a new home is something that most new homeowners do and find themselves facing a lifetime of huge mortgage payments they can’t afford. Foreclosure should never be the end of the dream of homeownership.

Be Informed- There is a wealth of information available for those that are looking to purchase a home. If there is a trend of specific types of loans that are on the rise, it’s best that everyone be informed. Hopeful homeowners should know what the current interest is as well as what type of mortgage they are interested in.

There are hundreds of tips that potential homeowners can use to make their experience easier. These tips are given to make a stressful experience less so. The idea of having their complete financial life reviewed and judged is very unnerving for some people. While it’s a process that is stressful, the end can lead to owning a home that belongs to them.

Buying a home isn’t a decision to be made lightly. It’s not something that should be done without understanding and knowledge. The best dream is the one that isn’t an effort to achieve and maintain.

May. 8 14'
1. On the Bridge loan, you can take out up to 85 percent of the value, and put it into a new home pamyent is deferred for 6 months. That will enable you to #1 buy the new home, or build the new home #2 gives you time to sell your other home.2. You are still responsible for all mortgages.3. Lenders will take a hard look at your credit, your middle credit score needs to be in the 600 s for the Bridge loan. The middle score varies from lender to lender rom 620 680 and higher. Other factors come into play.BRIDGE LOAN:It is a short-term bank loan of the equity in the home you are selling. You may take out a bridge loan, or interim financing, to help with a knotty situation: closing on the home you are buying before you close on the property you are selling. This loan basically enables you to have a place to live after the closing on the old home. The key to a bridge loan is having a qualified buyer and a signed contract. Usually, the lender issuing the mortgage loan on the new home will write the interim financing as a personal note due at settlement on the property being sold.If, however, there is no buyer for the property you have up for sale, most lenders will place a lien on the property, thereby making that bridge loan a kind of second mortgage.Things to consider: interest rates are high, points are high, and there are costs and fees involved on bridge loans. It may be cheaper to borrow from your 401(K). Actually, any secured loan is acceptable to lenders for the down pamyent. So if you have stocks or bonds or an insurance policy, you can borrow against them as well. So basiclly it is this: A bridge loan is financing secured by your current home, a home typically listed for sale. The bridge loan is used to finance the purchase of the second home and is paid off when the first home sells. In addition to other questions, when considering a bridge loan seller/borrowers should ask about interest costs, up-front fees (because bridge loans are short-term financing, it's better to pay a higher interest rate than points for a loan which will generally last just a few weeks or months), and what happens if house #1 takes longer to sell than anticipated.
Jul. 7 15'


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