3 Steps to Obtain a Mortgage

If you are seriously planning to buy a home anytime soon, then the first thing that should be on your bucket list is to get your credit ratings in order. Once you clean up your credit report, identify, pay off and close most of your credit cards, the next thing you need to do is shop for a mortgage. Following are the preliminary steps that you need to follow in order to obtain a mortgage: 

1.Get Pre-Qualified: 

Getting pre-qualified is the first step of the mortgage process. In order to get pre qualified, you meet a lender and provide him information about your income, assets and debts. Based on that information, the lender will provide you with a rough estimate of how much money you can borrow. The entire pre-qualification process is informal as the lender does not verify the information that you provide and doesn’t even charge you a fee. Neither does he formally agrees to provide the loan amount, you get pre-qualified for. 

However, while the pre-qualification is not a guarantee of your loan getting approved, it does provide you with a general idea of the amount lenders will agree to give you as a mortgage. This allows you to look for the properties that fall within your budget. 

2.Get Pre-Approved: 

The pre-approval process is more or less the same as the pre-qualification process. The only difference being that pre-approval is more formal. The lender officially confirms your ability to take a mortgage by checking your credit rating and verifying your financial and employment information. He also charges a fee for pre-approving you and provides you with a written commitment that you are eligible to borrow a certain amount of money as mortgage. 

Having a pre-approval strengthens your ability to buy a home as sellers give preference to the offers made by pre-approved buyers. This is simply because of the fact that pre-approved buyers have proved that they can actually afford to purchase the house. 

3.Finalizing a Lender: 

Mortgage banks, real estate agents, online lenders and mortgage brokers are all great sources of obtaining a mortgage. No single source of mortgage provides the perfect product for all kinds of shoppers, but knowing the pros and cons of all of them will help you in choosing the lender that is right for you.

•Mortgage Brokers: Brokers help more people obtain mortgage loans than any other source. The benefits of hiring a broker are that they have access to large number of lenders and they can shop the marketplace and compare the deals offered by various lenders, on behalf of the client. They can be extremely useful if you are looking for an unconventional type of loan or have damaged credit. 

On the other hand, the downside of working with brokers is that their goals are different than yours and they can sometimes get you a bad deal to increase the amount of their commission. Also, brokers don’t work for free and sometimes the fee charged by them can be a bit high. 

•Banks: Banks are the traditional source of mortgage funding. If your local bank, where you have your savings and salary accounts, is offering you a good interest rate and alluring terms, then there is no reason to not choose them. However, if it is not offering both, then there are many other banks in town whom you can approach. 

The only negative aspect of working with the banks is that they offer a limited number of mortgage options and they are generally not that flexible when it comes to fees. 

•Real Estate Agents: Real estate agents often introduce their clients to quality private lenders. As they are in the business of selling houses, it is natural that the agents know a lot of mortgage lenders. Many homeowners prefer to work with a lender suggested by their real estate agent instead of shopping for loans themselves. However, working with a private lender, suggested by your agent, may also offer only a limited number of mortgage programs. 

•Online Lenders: Shopping for mortgages online has gained immense popularity in the past few years, due to the plethora of benefits that it offers. The major benefits of shopping for mortgages online are that it is quick, convenient and allows you to contact and compare the options provided by multiple vendors simultaneously. 

You don’t have to leave the comfort of your home and you can shop at any time of the day. You are no longer bound by the business hours. Even if you eventually take a loan from a brick and mortar establishment, the plethora of data gathered from comparing vendors online will provide a wealth of information that will be crucial in attaining good mortgage terms. 

The Bottom Line

Getting pre-approved is necessary for making sellers seriously consider your offer. When it comes to shopping for mortgage, no method is right or wrong and every lender has some pros and cons. However, it is imperative that you plan in advance and shop carefully in order to obtain the best deal that suits your financial needs. 

Want to stay updated on Real Estate & Mortgage industry, follow us on Facebook, Twitter & LinkedIn. Or if you need any advice regarding home loans, feel free to contact All Western Mortgage Lending at 702-850-2790.

Qualities of Top Online Mortgage Lenders

There is a lot more to finding good online mortgage lenders than just choosing the one whose website looks flashy and promises the best interest rates. You need to make sure that the lender you have chosen, possesses a few qualities that will make your loan process a positive experience. Here are the qualities you must look for in an online mortgage lending company before finalizing one. 

1.Personalized Attention: The process of mortgage lending can be a bit stressful, confusing and tiresome. Therefore, it is important to look for a lender or a company that will offer you his/its time for answering all your queries and to walk you through the path of mortgage with patience and expert guidance. Also, a good lender must be available at the time when you need him. 

2.Experience: Experience is the most important quality of a mortgage lender. Experienced lenders have first-hand knowledge about the entire mortgage process and they possess the technical know-how of handling complex applications. Therefore, before you choose a lender or an online mortgage loan company, find out for how long they have been in this business. 

3.Educator: If you are buying your first home, chances are that you must not be aware of a majority of its terms and formalities. Therefore, you need a lender who can guide and educate you about the entire process. 

4.Must Provide Different Options: When it comes to taking a mortgage loan, different individuals have different needs and are tackling different situations. Therefore, it is wise to choose a lender who has a variety of loan options in his arsenal from which you can choose the one that suits your requirements in the best possible manner.

5.Reputation: Reputation of a lender is an extremely important prerequisite for you to choose him over others. If a lender’s previous customers have good things to say about him, chances are that you’ll have a better experience as well. There are various online forums where you can check the authenticity of a lender or you can obtain information regarding his reputation from Better Business Bureau. 

AWM Lending has been helping its clients in buying their dream homes since its inception in 1981 and possesses all the above mentioned qualities. Come, talk to us on 702-850-2790 and help us in helping you get your perfect home.

The Mortgage Loan Process and Roles of Various Parties Involved

Most would-be homeowners dread the cumbersome mortgage loan process that is necessary for realizing their dream of buying a home. But, the mortgage loan process doesn’t necessarily need to be difficult. As soon as you fill AWM Lending’s short mortgage application form, our Loan Originator will work closely with you till the time of closing of your loan. 

Here is a summary of the loan process to give you an idea of what to expect.

Borrower

•Fill out the short mortgage application (unless your agent advice you to fill the complete form)

•Contact Loan Originator

•Initial documentation (bank statements, pay stubs, tax returns etc.)

•Homeowner’s insurance

•Signing of final loan documents given by the Closing Agent

•Provide mortgage closing funds

Mortgage Loan Originator

•Informs about various mortgage options to the borrower

•Quotes interest rates and fees corresponding to the mortgage options

•Assists in completing the application forms

•Requests for documents necessary to complete the formalities

•Providies estimates of loans and other disclosures to the borrower

•Orders appraisals

•Locks in interest rates

Underwriter

•An underwriter’s primary role is to review the documents submitted by the borrower and establish his/her credit worthiness

•Issuing final loan decision

Processor

•A processor confirms the terms and conditions of the loan with the borrower

•Collects all the additional documents

•Re-submits the file after collecting all the additional documents to the underwriter for approval

Appraisal Reviewer

•Reviews the value of the property for appraisal

•Issues the appraisals to the borrower

Closer

•Prepares closing document package

•Sends the package to the closing agent

•Wires loan funds

Closing Agent

•Schedules the closing of mortgage

•Informs the borrower about the funds that are required for closing the loan

•Informs and presents the borrower with the final documents that need to be signed for closing

•Witnesses the sign of the borrower on all necessary documents

What Is The Right Time To Refinance Your Mortgage?

What is Refinance?

Refinancing the mortgage means paying off your existing home loans and replacing it with a new one that is offering better rates and better terms. 

Benefits of Refinance

Refinancing your home loans help you in cutting down the monthly mortgage payments, reducing the loan term and total repayment amount and helps in building up the equity quickly. 

When should you consider Refinance?

When the interest rates on home loans start to drop or home values start rising, it may be a good idea to refinance your mortgage. Let us learn about these scenarios in detail. 

1.Falling Mortgage Refinance Interest Rates: It can be a great time to refinance your home loan when the mortgage rates are falling. There are two ways to reduce your total cost in such a situation:

•The repayment term remains the same, but your monthly repayments get reduced

•Your monthly payments remain the same, but your loan term gets reduced and you are able to build equity faster.

2.Home Values Rise: 

If your home’s value has increased substantially, refinancing helps you take advantage of that increased equity. For example, you can use the increased equity to pay off high interest debts or use it to pay for high-priced expenses like your child’s education or weddings. 

3.You Haven’t Been In The Home For Long: 

Refinance makes most sense when you approach a mortgage refinance company in the early years of your mortgage term.  This is due to the fact that in the initial years, your monthly payments are paying off the interest part of your mortgage. When you enter the part of the cycle where majority of the monthly payment is covering the principal, you are better off keeping the original loan. 

For more information about refinance and for availing the best mortgage refinance rates, visit http://www.awmlending.com/mortgage-refinance.php or give All Western Mortgage a call at 702-850-2790.

How To Choose The Right Neighborhood While Buying A Home ?

Buying a new home and moving into it is one of those big decisions that you make only a handful of times in life. While the experience is full of excitement and is accompanied by new hopes and dreams, there are not many people who wish to do change homes frequently. This is why choosing the right neighborhood for your new home, where you’ll spend a considerable amount of time, requires a lot of research and effort. Following are the few things to consider while choosing a neighborhood to buy a home in. 

Safety: The top most criterion of selecting a neighborhood to live in must always be your and your loved ones’ safety. While no area can be deemed as 100% safe, there are certain neighborhoods that are well protected and where crime is considerably less than the other neighborhoods. Before buying a home, do ample research about crimes in various areas. Knowing the high and low risk areas in your city can save you from a lot of regret and can help in keeping you and your family safe from harm. 

Other Homes In The Neighborhood: Pay close attention to other homes in the neighborhood while settling down. It is a good idea to talk to the families/people living there and get a general idea of the neighborhood and its community. After all, you won’t want to end up living next to impossible people. Also, if there are too many vacant houses, you might want to find out the reason and if there are barren patches near your dream home, then find out the future plans of development for the area. 

Public Transportation: Access to affordable public transportation is a key factor in selecting the neighborhood where you’ll stay. Availability of public transportation makes commuting to work easier on a daily basis and allows prompt access to shopping zones, entertainment centers and other key hubs of town. Moreover, houses that are near subway stations or other kinds of public transportation retain their value for several years and if you are an environmentalist, then living in a neighborhood that is close to public transportation just might appeal to you a bit more. 

Schools and Education Centers: If you are a couple with children or are planning to have kids in the near future, you might want to live in a neighborhood that is close to decent schools. Homes that are located in a near vicinity of schools are one of the most sought after places and that helps in retaining the value of your property over time. 

Recreational Areas: For some homeowners, the deciding factor in choosing a neighborhood is community amenities. If you are one of those people, you might prefer buying a home in a neighborhood that has bike lanes, jogging tracks, community club house, swimming pool etc. These amenities provide some much needed exercise in a familiar outdoor setting, which is good for your health and well-being. Most newly developed communities include these facilities that facilitate a healthier lifestyle and attract the modern homeowners. 

Aesthetics: No one likes to live in an ugly neighborhood, period. A visually pleasing neighborhood gives the impression that the people inhabiting it care about their homes and are members of a cohesive group that takes pride in their community and neighborhood. Alternatively, dilapidated homes and shabby and unkempt front yards are symbolic of issues, such as high crime rate and low safety. When the neighborhood is aesthetically pleasing, it attracts the new home buyers as it provides a sense of belongingness. 

Close Proximity of Important Services: Having vital services such as police stations, hospitals, fire stations in close vicinity can save yours or your family members’ lives in an emergency situation. Also, having department stores in the area caters to your day to day needs. Therefore, most homeowners prefer living in an area that has quick access to these services. 

Quiet and Peaceful Environment: Hardly anyone would wish to live in a neighborhood plagued by constant loud noises. Whether it is of traffic, busy commercial zones or anything else. Noise can sometimes be the biggest red flag for potential buyers. If you feel that a particular home is in such kind of a neighborhood, it is better to walk away before you commit to it. 

As you might have figured out by now, choosing a neighborhood is a demanding and time consuming process. You might approve of some factors, while others may prove to be a turn off. The best way of choosing the right neighborhood is to make a list of pros and cons of your shortlisted homes and then simply compare them with one another. One of them is bound to stand out as your ideal neighborhood. 

Happy Home Hunting!! 

Want to stay updated on Real Estate & Mortgage industry trends, follow AWM Lending on Facebook, Twitter & LinkedIn. Or if you need any advice regarding home loans, feel free to contact All Western Mortgage Lending at 702-850-2790.

The Difference between Pre-Qualified and Pre-Approved

It has been rightly said that the future belongs to those who prepare for it. There is no advice better than this for potential homebuyers who need to start preparing for the task of buying their dream home. Without preparation, many potential buyers are in for a disaster, as the list of things that can go wrong is endless.

Most buyers make the mistake of using the terms, pre-qualified and pre-approved interchangeably. 

Whereas, there is a world of difference between these two. If you are also one of those who are confused by these two terms and don’t know what means what, then don’t worry. We’ll help you get up to speed on the difference between these two terms and why a misunderstanding can spell DOOM for your dream of buying a home.

Pre-Qualified

Getting pre-qualified for a loan is the first step of the mortgage process and is a fairly simple one. All you need to do is supply a lender or a bank with your overall financial picture, comprising of your income, assets and debt. The lender evaluates this information and gives you a general idea of the loan amount for which you qualify. 

Pre-qualification is not a lengthy process and can be done over the phone or even online and has no costs associated with it. In order to get pre-qualified for a mortgage, analysis of your credit report and in-depth analysis of your ability to purchase a home is not required.

Because it is a quick process devoid of any legality and based solely on the information that you provide to the banker/lender, your pre-qualified amount is not a sure thing. It’s just a general idea that states you might be eligible for a certain amount of loan. 

‘Might’ is the keyword here. Being pre-qualified for a mortgage doesn’t provide any guarantee. On the other hand, a pre-approved buyer is the one who has been investigated thoroughly and carries a surety that his mortgage will get approved for a certain sum.

Pre-Approved

Getting pre-approved is the second step of the mortgage procedure and follows the pre-qualification stage. Pre-approval is a more in-depth and detailed analysis of your financial condition that requires you to fill up an official mortgage application and sometimes also pay a certain amount of fee. 

Once you complete the application and submit it to the lender, the next step involves submitting the necessary documents so that the lender can perform an extensive check on your current credit rating and financial background.

After performing all the necessary checks, the lender can tell you the exact amount of mortgage that you can secure. The lender also provides you with a better picture of the interest rate that will be charged on your mortgage and you might also be able to lock in a specific rate in some cases.

With pre-approval, you get a written conditional commitment for an exact loan amount that allows you to look for homes within that price level. Moreover, a pre-approval provides you an upper hand in your negotiations with a potential seller, as he will know that you’re one step closer to securing a mortgage.

Another major advantage of getting pre-approved before you start hunting homes is that you’ll know exactly what kind of a house you can afford. Thus, you won’t waste your time in guessing or looking at properties that are out of your budget. 

For instance, if you have been pre-approved for a mortgage of $300,000, you’ll look for homes within that amount and not for a home that costs $500,000.

Getting pre-approved also enables you to move quickly when you find your perfect home because the offer you make won’t be dependent on obtaining financing and that saves valuable time. 

A pre-approval letter also makes sure that the seller knows your offer is genuine and serious. A pre-approval letter basically prevents you from losing the home to another potential buyer.

Conclusion

Pre-approved and pre-qualified are not the same things. Therefore, don’t just assume that a lender will provide you a loan until you get pre-approved.