Way back, leaders have greatly decreased their leniency when it comes to underwriting. Because of this, many unqualified borrowers (or such termed sub-prime borrowers) have been approved of mortgage. Over time and as market of various economic sectors has changed, the interest rates for mortgage increased. Due to its volatility, plenty of the unqualified buyers had to suffer paying expensive rates; thus, increasing one’s monthly mortgage.
Although one has the option to refinance, this option became harder to do since home values have decreased. As a result, most homeowners were forced to face foreclosure and creditors had to endure plenty of losses.
This is not a lovely sight for mortgage investors. Now lenders have to work hard and return the leniency to borrowing to be able to prove their worth to their investors. As a result, every borrower is affected as borrower is affected as lending these days may not be as easy as it was before. Good for you if you are a prime borrower, at least you will have a good fighting chance of getting offered upfront with great rates. But what if you do not belong to this group? Will you ever get the chance?
It is not the end of the world. Any person wanting to get mortgage has a chance to get good rates. The creditors have not closed their doors completely and even if they have gone stricter with their requirements, there is still a work around. Figuring it out and doing it could help you get to that prime borrower spot. In normal circumstances, where there are no extreme problems like delinquencies, you can get good rates approved with the best deals. Just bear in mind the following:
Check your credit performance and make sure you leave a good trail of history. Your history has got something to do with calculating your credit scores. And if you have a high score, it would normally mean you are entitled to better rates. It is part of the lending practice to use your credit scores as one of the basis for identifying rates. Hence, exerting efforts to perform financing activities that could increase your credit scores is a great help.
Always be ready with your documents. Borrowing money will not be processed based on your answers from the interview. Lenders would need certain documents to have obtained data that will be used in creating an objective opinion. The opinion formulated is all about qualifying you as a borrower. Any inaccuracies in these documents may also lead to severe limitations in mortgage and could pull you back from your financial ventures.
Work with a trustworthy lender. If you want to secure your interest, this is the way to do it. Working with the wrong lender could put you in a great financial risk. You need t look for a lender who can understand you and that can give you simple advices to improve your financial portfolio. Hence, when you select among the borrowers, do not just stick to one. Visit several banks, ask around and choose the best among the best.
By John Hester