There are virtually hundreds of mortgage companies in New Jersey, and it may be quite difficult to choose one that fits all your needs. Before you proceed with the search, it is always a good thing to sit down and write a list of requirements you need your mortgage company to fulfill. It usually pays off to hire a mortgage company that has been on the market for a good few years, and has built a reputation of being a reliable and affordable company. Make sure this company does not have any hidden fees, or it includes third parties when you apply for a loan.
First-time home buyer loans tend to be confusing and intimidating. That is why it is important to find a company that will get you flexible and affordable financing in addition to competitive mortgage rates. Reputable mortgage companies usually have a dedicated home loan expert available for potential clients, who will simplify the loan process, so it is understandable and that every part of the contract is clear. First-time home buyers are investing into their future through a loan, and that may be the biggest investment they are ever going to make. For that reason, the investment has to be carefully planned, with attention to each and every detail.
Many mortgage companies have websites where you can get a quick rate quote by pre-qualifying, which will give you an insight into how big of a loan you can afford. The company will look into your income, debt and credit with the aim of assessing which loan suits you best. It also a good decision to check mortgage rates on Bankrate.com. But the lowest rates are not the main prerequisite when it comes to choosing a loan company. It is always a good idea to check with your friends and family about what they recommend.
It is important to be aware of your freedom. In other words, you do not have to apply for a loan to ask questions. It is usually enough to send an email or make a phone call and inquire about loan programs a certain mortgage company offers. This will also be a proof of customer service because if the loan officer is hard to reach, that says a lot about how the company treats its prospective and current clients.
How Do Mortgage Companies in New Jersey Assess Clients and How You Can Use That Information
The system of evaluating a mortgage consists of 14 factors. Some of them concern the parameters of the desired loan while others concern the borrower. The factors include but are not limited to equity, or the appraised value or sale value of the home with the loan amount deducted, credit history, liquid reserves (for instance cash in a checking account after the loan closing divided by monthly mortgage payment), total debt-to-income ratio (the number of debt payments, existing loans, credit cards and so on divided by gross income per month), the work status of the borrower (self-employed or salaried), loan period, what kind of property is the borrower buying (condo, house…), prior foreclosures, bankruptcies or mortgage delinquencies, and even whether the down payment is coming from a third party.
How Can You Influence The Outcome Of Your Loan?
It feels logically to ask; how can you, as a loan buyer, influence these parameters. Some experts argue that equity, credit history and liquid reserves play a crucial role in getting a loan. If a borrower opted for a higher down payment, it will increase the chances of them getting a favorable loan. Also, if the mortgage company sees that you have managed your finances well and have some leftover cash on your bank account after closing, which serves as protection against default risk.
Borrowers who have declared bankruptcy in the past are considered risky as well as clients who had been 60 days late on a mortgage payment within the last two years. When it comes to parameters like loan term, the assessing system considers 30-year fixed rate loans to be less risky than adjustable rate mortgages. Statistics have shown that borrowers default less frequently if they have stable long-term loans.
You do not need to worry about, not getting a favorable loan if you have changed 7 jobs in the last six years. The mortgage companies tend to look more closely at consistency of earning, rather than how the money was made. So if you were switching from one job to another you may have the same chances as a contractor who has been in one type of business for a few consecutive years.