9 Tips On Applying For A Second Mortgage
People usually apply for a second mortgage or home equity loan when they need money for debt consolidation, to pay large expenses or for home remodeling and home improvement. Second mortgages are generally categorized as fixed interest rate home equity installment loans (HELOANS) and adjustable mortgage rate home equity lines of credit (HELOCs). Which you choose depends on your needs, but the application and approval process is similar for both. These nine tips will help your loan process be as hitch-free as possible:
1. Compare options like mortgage refinancing and other loan options to determine if a second mortgage is the best choice.
2. Make sure you can tell lender what the purpose of the loan is. Your answer will help determine whether or not you are approved.
3. Check your credit report for errors and get your FICO scores (myfico.com/12) because lenders will review your FICO score to determine your loan rates. Check "How to Improve Your Credit Score" for more information on cleaning up your credit.
4. Compare several home equity loan options. Discuss the loan programs with your broker or lender and find the best loan for your situation. Getting a good interest rates isn't a bad idea either.
5. When applying for a loan, you will get a mortgage checklist from your lender containing the list of paperwork you need to close the loan, including:
• Copy of deed to property.
• Recent tax appraisal.
• Last two years' W-2's, tax returns and current pay stub, or two years' tax returns if self-employed. Be sure to include all schedules.
• Proof of income from alimony, child support, disability payments, lawsuit settlement, inheritance or other income source.
• Copies of your last 3-6 bank statements.
• List of all open credit accounts (account numbers, payment amounts, and balances).
• Your current mortgage statement.
• Homeowners insurance information (name, account number and phone number of agent).
6. Faxing documentation from the checklist will expedite the loan process more than mailing it.
7. Fill out your loan application thoroughly, or it may delay approval and loan closing.
8. Beware of bad loans. The Federal Trade Commission (FTC) warns that you may be signing into trouble if the lender encourages you to falsify your application to get the loan, urges you to borrow more than you need, pushes you into unrealistic payment terms, shows up at closing with a different loan product than you agreed to, asks you to sign blank forms, or denies you copies of documents you signed.
9. Has your mortgage application been rejected by a lender? Ask why it was rejected to find out what you need to do to secure mortgage loan approval in the future. Sometimes paying down some credit cards can increase your credit score just enough to qualify.
More Articles
A Good Understanding Of Mortgage Backed Securities
No Down Pymnt Or Bad Credit Mrtg Loans
A Hud Reverse Mortage For Retirement
A Guide To Adjustable Rate Mortgage Loans
A Guide To California Mortgage Rates
A Home Mortgage Makes Dreams Come True
Mortgage Refi How To Get Approved
Products And Downloads
More Articles And Free Videos
... loan, you can save huge amounts on the total interest repaid to a lender. The decision on the term of the loan is relatively simple, but entirely dependent upon your personal situation. There is no absolutely correct choice. First, you need to determine if you can comfortably afford the higher payments ...
A Guide To California Mortgage Rates
... market value for the property to be mortgaged, proper and relevant documents relating to the person s income, penalty for prepayment and late payment, FICO score, and many more. Consulting a financial adviser before applying for mortgage would be a good idea to avoid any hassles later on during the tenure. ...
A Way To Avoid Private Mrtg Insurance
... lying around. For this matter, private mortgage insurance (PMI) was created as a way for mortgage companies to recoup their money if a homeowner defaults on the loan. There are various loans available to assist people with down payments. In some instances, homeowners can obtain 100% financing, and avoid ...
3 Steps To Pay Off Mortgage In 7 Years
... off your first home, if you're a first-timer), a financial "snapshot" or review must be completed. Taking a look at your entire picture of income, debts, and how it relates to your goals, is the crucial step, in determining how best you should start your plan. What is the strategically best way for you ...
Consolidate 1st And 2nd Mrtge Into 1 Low Pymnt
... But a fixed rate loan can also give you reasonable rates with security that they won t rise in the future. The other option is to extend your loan term, especially in the case of your second mortgage which usually is for five to ten years. By consolidating your loans to a thirty year loan, you lengthen ...