You have found your dream home is in Orange, New Jersey. One of the most important decisions you will make in your lifetime is purchasing a new home. This purchase usually requires obtaining a mortgage. What steps are necessary to qualify for a mortgage? Step number one is to find an experienced loan officer to guide you. Loan officers are able to determine your eligibility for a mortgage from the basic information you provide at your initial meeting. You will fill out a loan application and will be instructed on what documentation is necessary to get the loan process started.
Necessary Documentation
This necessary documentation will include your employment history, your credit history, bank statements, pay stubs, current housing costs, and information on other assets, such as 40lK plans or mutual funds. Forms will be sent to both your employer and your banks to verify employment and deposits. All of this information will be analyzed and will help to determine how much money you will be able to borrow.
Types of Mortgages
Your loan officer will be able to explain the many types of mortgages to you. The two common mortgage types are fixed rate and adjustable rate. These mortgages differ, as the fixed rate mortgage will have a set interest rate for the duration of the loan while an adjustable rate mortgage can have interest rates that fluctuate at predetermined intervals. The benefit of a fixed rate mortgage is that you will have the same mortgage payment every month. Adjustable rate mortgages will have a low interest rate in the beginning, but your mortgage payment can change depending on the interest rate when it is time for an adjustment.
Your loan officer will be able to explain even more mortgage packages to you. Together you will find the one that will work for your financial situation.
Closing
After you have been approved for a mortgage, your loan officer will set up the meeting to close on your loan. This is the final step in the loan process. A few days before closing, you will be informed of the closing costs and your down payment amount. You will need to bring a certified check in this amount to closing. You will sign your name numerous times on multiple documents. Ask questions if you do not understand what you are being asked to sign. Double check all figures. Now is not the time to be surprised. Normally, closing will last about an hour but allow adequate time just in case problems arise.
Refinance and Home Equity Loans
A refinance loan is a great idea for existing homeowners in Orange, New Jersey. This option is particularly beneficial if you are unhappy with the terms of your initial mortgage. You will be replacing your old mortgage with a new mortgage. You can choose a new mortgage type and even change the duration of your loan. If the current interest rate is lower than the rate you have on your mortgage now, refinancing will give you a lower mortgage payment. If you have unexpected expenses, a refinance loan will allow you to free up money to help pay these expenses.
Home equity loans are also an option for existing homeowners. The longer you live in your home, the more equity you have to borrow against. This loan is available either as a lump sum or a line of credit and has a term of 10 to 15 years. Interest will only be paid on the amount that is borrowed. You can use this money to buy a new car, to pay college tuition, or even for an upcoming wedding.
To get information on mortgages, refinance loans, and/or home equity loans in Orange, New Jersey, contact one of our experienced loan officers today.
