Aug 19 2010

Getting Preapproved for a Mortgage

Getting Preapproved

Getting preapproved for a mortgage can help you buy a home you can afford.

By Marcie Geffner – LendingTree.com

January 23, 2009

If you’re getting ready to buy a home, you probably already know that lower home prices and interest rates have made homes much more affordable. But did you also know that getting preapproved for a mortgage can help you shop for and find a home that’s right for you? Here’s why:

Find out how much you can afford to spend

It’s no secret that lenders have tightened their standards or that loan qualifications now tend to be stricter than they were a few years ago. Lenders today will want to review your income, debts and credit score, and they’ll expect documentation that shows your income and assets.

By getting preapproved for a loan, you’ll be able to find out whether you’ll be able to qualify and how much you’ll be able to borrow. Since you’ll know how much you can afford to spend before you start shopping for a home, you won’t get your heart set on a home that’s too pricey or miss out on a home you thought you couldn’t afford. Instead, you’ll be able to limit your search to homes that meet your needs and budget. By getting preapproved, you’ll also get a good-faith estimate of your closing costs, so you won’t be surprised by those expenses later on.

Find out your interest rate and monthly payment

Getting preapproved for a loan will also introduce you to the loan application and approval process. You’ll find out the types of loans, interest rates and monthly payments that may be offered to you, depending on your income, credit score and other aspects of your personal situation. And when you find a home you want to buy, you’ll be ready to make an offer without delay. A preapproval letter from a lender will help make a good impression on home sellers. Home sellers will know that you’re serious about buying a home and that you won’t have to struggle to get financing. That might even improve the odds that the seller will accept your offer.

How to get prequalified and preapproved

To get “prequalified” for a home loan, you’ll need to answer some basic questions about your financial situation. After that, the lender will review your paycheck stubs, bank statements and other documents, and then you’ll be “preapproved” for your loan. Be aware that prequalified and preapproved are preliminary; your loan will still need to receive final approval before you can buy your new home.

via Preapproved Mortgage – Getting Preapproved for Mortgage. Continue reading


Aug 12 2010

Unemployed? The New HAMP Loan Modification Program Might Help You Keep Your House

HAMP

If you’re unemployed and can no longer afford your mortgage, a new Making Home Affordable loan modification program might offer some relief.

The new Unemployed Program (UP) starts August 1, 2010, and it requires lenders to reduce or suspend payments for at least three months for eligible borrowers. It is at the lender’s discretion to extend the forbearance, and the program ends once the borrower gets a new job.

According to Supplemental Directive 10-04, mortgage servicers are required to offer an Unemployment Program forbearance plan to a borrower who meets the following criteria:

1. The mortgage loan is secured by a one- to four-unit property, one unit of which is the borrower’s principal residence.

2. The mortgage loan is a first-lien mortgage originated on or before January 1, 2009.

3. The current unpaid principal balance of the mortgage loan is equal to or less than $729,750 for a single-family property. Higher loan amounts apply to two- to four-unit dwellings.

4. The mortgage is delinquent or default is reasonably foreseeable.

5. The mortgage loan has not been previously modified under the Home Affordable Modification Program (HAMP) and the borrower has not previously received an UP forbearance period.

Continue reading