The Bond Market affects the pricing on fixed-rate mortgages. With unemployment figures holding steading, and jobs being added to the economy, bond yields are up and are putting pressure to mortgage lenders to move fixed-rates up.
If you're thinking about buying or selling a home in the next 4 months, one of the best ways to ensure that you'll get a five-year fixed rate below 4%, is to reset your pre-approval rate. You may also want to consider having a second opinion on your pre-approval considering that there will be major changes occurring to mortgage-lending starting on March 18th.
Not only does a mortgage pre-approval help you secure an interest rate for 120 days (4 months), it also can ensure that when you do find a house that there will be no issues with solidifying the mortgage-financing. Ensure that your mortgage professional has pulled a credit score and asked for income confirmation by way of an employment letter and pay stub. Credit score and income confirmation are necessary to issue a full pre-approval. Many banks are getting lazy and only pre-qualifying their customers, which can lead to problems when you've finally found a home.
Friday, February 4, 2011
Tuesday, February 1, 2011
Beware: Your bank may not be thorough in their mortgage pre-approval
At least once a week, my office receives a call from a panicked customer who thought they where pre-approved for a mortgage, only to find out they weren't. The reason why the person is often panicked is because the pre-approval for the mortgage was in fact only a pre-qualification.
Here's the main difference between a pre-approval and a pre-qualification for a mortgage. Protect yourself from any unexpected surprises and ensure that a thorough pre-approval is done before you decide to sell your home and move or even if you're buying your first home.
Also, it's extremely important to speak to you mortgage broker before you list your home (I'll cover this topic in another posting).
Credit Check
Your mortgage broker can pull your credit report almost instantly once you've completed an application. The broker will review your credit history and accounts to confirm balances on your credit cards and lines-of-credit and car loans. A credit bureau will also show if there are any collections including any spousal support or child support payments outstanding. I've also found that in cases where people have common names, there may be errors on the credit history (e.g. someone else's credit can appear mistakenly on your credit history).
Employment letters
If you're an employee an employment or job letter is always a good thing to have when you're applying for a mortgage. The job letter states the length of time you've been with your employer and how you get paid. If you've just started a new job, and plan on buying a house, try and negotiate a no probationary period for your employment. Getting a mortgage approved while your on a probationary period at work can be tricky because technically the individual is not employed "full-time"
Here's the main difference between a pre-approval and a pre-qualification for a mortgage. Protect yourself from any unexpected surprises and ensure that a thorough pre-approval is done before you decide to sell your home and move or even if you're buying your first home.
Also, it's extremely important to speak to you mortgage broker before you list your home (I'll cover this topic in another posting).
Credit Check
Your mortgage broker can pull your credit report almost instantly once you've completed an application. The broker will review your credit history and accounts to confirm balances on your credit cards and lines-of-credit and car loans. A credit bureau will also show if there are any collections including any spousal support or child support payments outstanding. I've also found that in cases where people have common names, there may be errors on the credit history (e.g. someone else's credit can appear mistakenly on your credit history).
Employment letters
If you're an employee an employment or job letter is always a good thing to have when you're applying for a mortgage. The job letter states the length of time you've been with your employer and how you get paid. If you've just started a new job, and plan on buying a house, try and negotiate a no probationary period for your employment. Getting a mortgage approved while your on a probationary period at work can be tricky because technically the individual is not employed "full-time"
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