How to Determine The Type of Mortgage Loan to Apply
for – home loans San Antonio
There are many different types of San Antonio mortgage loan available to individuals. However, not all mortgages are geared to each financial situation, so it is a good idea to study your options.
Steps to Determine Your Loan Position
Determine your credit risk level by reviewing your FICO score. You can get your FICO score online by contacting all or some of the three major credit watch companies. Be aware that if your FICO is below 620, you will probably need to improve your credit score before applying for a San Antonio mortgage loan. A score between 620 and 699 indicates moderate to moderate / high credit risk, while a score of over 700 is considered good to excellent.
Document your sources of income. If you have a regular job, proof of your income will be your income tax returns, pay stubs and photocopies of your commission checks. If you are self-employed and plan on documenting your income, you will need copies of your federal income tax returns from the states over the past two years, year-to-date profits and losses, the bank statements and a balance sheet of your business.
Create a list of your financial liabilities. The list should include credit card debts, auto loans, student and personal loans, promissory notes, mortgages, etc. Be sure to document the total unpaid balance as well as what you owe for the minimum monthly payments.
Steps to Determine What Mortgage Is Right for You
Determine if you qualify for a special loan program that offers low down payments or no option a money down. Sometimes these types of loans are available for veterans, first time home buyers and even for people who want to buy homes in rural areas.
Determine which loan programs you qualify based on your FICO score. Generally speaking, the higher your FICO score the better the mortgage terms available to you. A higher FICO score also means that you will be entitled to a wide variety of San Antonio mortgage loan. If you’re FICO score is less than 700, be aware that you will probably have to apply for mortgages with higher closing points, higher interest rates, and possibly other restrictions attached to them. FICO scores over 700 will help you qualify for better mortgage terms. If you are self-employed, a FICO of at least 700 is usually required to qualify for a loan program.
Use your employment status to determine which loan programs could approve your San Antonio mortgage loan application. If you are self-employed, traditional loans may not be an option. If you can document the profit of your business via tax returns and receipts, use them to request a full doc or a declared income mortgage. However, if your actual monthly income cannot be documented in a tax return because, for example, you are writing off a lot of expenses, you will probably want to apply for a mortgage without a doc. If you are an employee, go to step four.
It is important to know how much you can afford for the down payment. If you have stashed several thousand dollars for your down payment, you may be able to put down 20 percent on your home loan. This would save you money in the long run because you will probably not have to buy private loan insurance. You can also save money by getting a lower interest rate on your mortgage. Having a few thousand dollars for a down payment will allow you to search for a down, cash or no mortgage down payment like an FHA, VA, 80/20 loan, or 100 percent loan. If you do not have funds for a down payment, try using a down payment grant available to anyone who qualifies for a loan.
Determine the structure of your practical interest. If the interest rate is supposed to go down during your tenure and you get a shorter term loan, the floating rate mortgage may be a good option. However, if the interest rate is already low and the future of interest rates is uncertain, a fixed rate loan is probably a better option.
Determine your preferred payment structure. If you are considering selling the property in a few years, an interest-only loan can be a good way to acquire and maintain a property while you solve this problem for resale. If you earn a monthly income large enough to allow, you can save a lot of money in interest by getting a 15 year mortgage rather than a 30 year mortgage. Be aware that a 50-year mortgage is also available in some states. This term mortgage allows some debtors to qualify to buy a more expensive property.
Compare all your options and decide which mortgage is the most appropriate for your situation and budget. If you have any questions, talk to a mortgage professional.