Monthly Archives: December 2013

Things Need To Know While Going For A Home Loan

It’s amongst the best feeling when you find your dream home. Once anybody find its dream home all s/he need to get a home loan to pay for the same. Going for a home loan requires some efforts, but one can easily get a right home loan while following the below mentioned step without any hassle.

Firstly, you should review your credit report, for that you need to order you credit report from the 3 major agencies of US (Experian,Equifax and TransUnion). It is one of the major part for your search for home loan. As most of the loan provider check and determine the ability to pay off your home mortgage. In this way the credit report provides all the valuable information to the home loan provider and tells them how punctual you are when it comes to paying your bills, and also how much you have already borrowed and still owe. It is a thumb rule that a good credit report gives the lender confidence that taking a risk on you will pay off. As good credit report provides a feel of reassured that you will pay them back, and certainly will make them more comfortable giving you a home loan.

Apart from this all you need to decide what home loan type will be best for you. Most people are going to be looking for a fairly standard loan. But before you start looking for home loans, you need to answer these questions:

– how much money do I have as a down payment?
– how much can I afford to pay in a home loan payment each month?
– will I be able to occasionally make extra payments off the principal?
– how stable is my income long term?
– is my income likely to rise over time?

All these questions are pretty much important because they help you to understand what you are looking for. For example in looking for a loan that requires a down payment of 20%, whereas you can only afford to pay 10%. Buying a home is a critical decision and for this you need to make sure that you get the best possible deal on your home loan.

How Hard Money Lender & Regular Mortgage Brokers Are Different

If your are in a mind set that Hard money lenders are just another type of mortgage brokers, then following are some of the points that will let you know that hard money lenders are actually very different from regular mortgage brokers.

Private lenders vs. institutions
Regular mortgage brokers work with institutions such as big banks and mortgage companies in-order to arrange mortgages, and make their money on points and certain loan fees. Under this process banks & loan companies focus more on closing costs and fees, so by the time the closing is over, the borrower has paid anywhere from a few thousand to several thousand dollars in fees, points and other expenses. By this more and more mortgage brokers are involved, the more points the borrower has to pay.

On the other hand, Hard money lenders, work directly with private lenders. Under this situation, if the hard money lender works with the private lenders individually, then for each new loan request, the hard money lender must approach each private lender until s/he has raised enough money to fund the loan. The money is then put into escrow until the closing.

Saving money with hard money lenders
Dealing with a hard money lender who has direct access to private lenders, one can save thousands of dollars in points and extra fees. Further using a hard money lender can help obtaining desired loan as you want with the mutually decided term & condition without impacting your personal credit. Furthermore if you can develop the right kind of relationship with the right hard money lender and private lenders, you too can be part of the “inner circle” of real estate investors who seem to find out about all the best deals first–and are building real wealth.