Online Mortgage Advice
From Adviceopedia
If you are thinking of getting a mortgage, online mortgage advice can help you become familiar with what to look for.
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Online Mortgage Advice
Estimating How Much You'll Need to Borrow
There are a wide variety of free mortgage calculators to help you estimate how much you can afford to borrow and how much interest you'll pay. Remember to factor in both the amount you want to borrow and the type of loan.
Finding a Lender
First, check to see if your current bank, credit card company, credit union, brokerage service, or other financial company offers online mortgage information and applications. You can often get better deals from a company that wants all your financial business, and you're also in a slightly better position to explain any irregularities or problems in your credit history or financial circumstances.
You can use sites like Lending Tree or Bankrate.com that get quotes from a variety of mortgage companies, or you can find a lender directly. Check your lender's reputation with the Better Business Bureau (you can look them up online), especially if you're not already familiar with their reputation.
Getting Your Credit History Ready
Because so many people have errors in their credit history, forgotten credit cards (especially the ones where you get a premium for signing up for a company's credit card), or other potential problems that could end up costing a lot of money or effort, it's a good idea to check your credit history first.
The three big agencies are Experian, Equifax, and TransUnion. It's worthwhile to check all three. Most of this can be done online.
Information to Have Ready Before Applying
When you apply for a mortgage, the lenders will require specific information. Be prepared with:
- Your total income for the past three years. Be sure to include alimony or child support, freelance income, bonuses, homebased business income, etc. as well as your current salary.
- Any significant debt or ongoing payments (for example, credit card carried balances and current balance, car payments, alimony or child support, student loans, etc.)
- List of other assets and amounts (such as bank accounts, other property, stock or mutual funds, bullion, etc.)
- Home insurance information (if refinancing)
- Condo or townhouse association fees (if applicable)
- Lot cost and building estimates (if you're building a new home)
- Home address if you've picked an existing home already. If you have a neighborhood but not a specific home picked out, the zip code or other official information about the community can be helpful.
Online Quotes and Pre-Approval
Most online mortgage lenders will give you online quotes and many will even pre-approve you online. Remember that these are not as legally binding as you may think, either for you or for the lender. In fact, if a lender suggests that by asking for a quote or pre-approval that you've locked yourself in with them, that's a good indicator that they won't be honest with you when agreements actually are legally binding. It's a good idea to get multiple quotes.
Avoiding Online Mortgage Scams
If an interest rate or terms quote sounds too good to be true, it probably is. It may be a teaser introductory rate or the lender may be glossing over how many points you'll have to pay. (Points are one-time charges, paid at closing, to get a reduced interest rate. One point is one percent of the loan amount.) You can get a general sense of how much different types of mortgages cost by visiting Bankrate.com.
Similarly, be alert if a lender offers you a considerably larger loan than your calculations say you can afford or that its competitors are offering. Some predatory lenders do this to get you to pay more than you can reasonably afford and then get you to take out subsequent loans at a much higher interest rate in order to keep up with your first loan's payments. While each mortgage company calculates its loan amounts slightly differently, there shouldn't be a huge difference between the highest and lowest loans offered.
Fine Print and Online Mortgages Advice
Most online mortgage advice isn't that different from regular mortgage advice. It's always a good idea to check the fine print. But with online forms, it's even easier to skim the fine print and miss something important.
Be sure to confirm the:
- Loan amount
- Loan term
- Interest rate
- Points (if applicable)
- Penalties and fees for late or missed payments
- Prepayment penalty
