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3 Things You Should Know Before Applying for a Mortgage Loan

3 Things You Should Know Before Applying for a Mortgage Loan

The mortgage loan application process can be daunting even for experienced homeowners. It can be helpful for people to make a list of items they should know before applying for a mortgage. This can make the process run more smoothly down the road.

1. Know How Much Home is Affordable

What everyone needs to know before applying for a mortgage loan is the amount of home that they can reasonably afford. While this may seem as simple as calculating the monthly payment that they can afford, many people forget to consider the real estate taxes and homeowners' insurance premiums that go along with this. People should also consider any HOA fees. All of this is important.

2. Know the Credit Score

Everyone applying for a home loan should also make sure that they know what their credit score is. The credit score is impacted by numerous factors, including someone's ability to pay off prior loans on time. The lower someone's credit score is, the higher the interest rate they might have to pay. They could be denied for a loan altogether.

3. Understand the Vocabulary

The worst mistake that someone can make is signing a document that they don't understand. Prior to signing on the dotted line you need to understand the difference between a fixed-rate and an adjustable-rate (ARM) mortgage, what points are, what an origination fee is, and whether or not you will be required to purchase PMI. The only bad question is the one that isn't asked. Therefore, don’t be afraid to ask for help if you don't understand something.

Those who are thinking about applying for a mortgage loan should reach out to Midland Mortgage today to speak with a qualified professional. They are always happy to help.

Posted Aug 10, 2017 by Midland Mortgage Corporation