Step 1: Determine Your Real Estate Goals

The first step in determining the best mortgage loan strategy is to take an asessment of your household or investment needs. As you know, the size of the property, neighborhood, real estate type and local economic factors will establish a market value from which you will negotiate a price. In addition, take into account your personal situation since factors such as family planning, job transistion and financial situations can impact the timing of a purchase decision.

Step 2: Understand Your Options

Once you decide that your goals in buying a property are firm, most likely you will need to seek financing. It is crucial that you know your credit score, as it is the most important factor that lenders will use to make a decision on the terms of your mortgage- or if you get one at all! Fortunately, you can access your credit score easily and for free in many cases. Websites like BetterCredit101.com partner with credit bureaus to provide all 3 credit scores. There is no standard interest rate that is tied to a score since these rates change based on global financial conditions. Common practice dictates that a lower credit score has a higher interest rate, and vice versa. The following chart provides a good rule of thumb in estimating your interest rate based on your credit score. Based on your credit score and the monthly payment that best fits your budget, use the Affordability Calculator below to compute the loan amount that suits your financial situation.

STEP 3: DETERMINE THE BEST OPTION

Now that you know the loan amount that you will qualify for, evaluate your loan options. A good broker should have relationships with several banks so that you can compare your offers. If you are visiting different lenders, use the Loan Comparison calculator to shop for the best deal.

STEP 4: GATHER YOUR PAPERWORK AND COMPLETE A LOAN APPLICATION

Congratulations! Now that you have a pre-qualification, you must complete paperwork to apply for final approval. In most cases, this involves gathering income documentation, your credit information, and information on your monthly payments. Usually, your lender will need:

• W-2/1099/Income documents from the previous tax year
• Last two weeks of paycheck information
• Last one – two months of bank statements
• Previous month’s bills or financial obligations (i.e., bills- not utility; credit card statements; monthly loan obligations)

Best Mortgage Loans Online wishes you the best of luck in your real estate endeavors.  Contact Us to be matched with professionals who will help you with the loan process.