marlasobbing asked:


I’m trying to get a mortgage in Florida. I have a credit score of over 800. Is there a seach engine where I can find what bank has the lowest rate?

Andres Navarro asked:


Owning a home is a huge responsibility overall, but the biggest single homeowner responsibility is managing the mortgage payment. Mismanage your mortgage and you could risk not being a homeowner anymore. (Yikes!) That’s why it’s so important that you avoid the following mistakes when choosing a mortgage:

#5 – Leaping before looking.

It’s no secret that mortgage lenders weigh a potential lendee’s credit history heavily when deciding whether to offer the lendee a mortgage loan. Still, countless people meet with mortgage consultants without knowing where they stand credit-wise. Don’t do it. If your credit isn’t up to par, the meetings will be in vain because it’s highly unlikely the mortgage consultants would be able to offer you an affordable mortgage that won’t bite you in the buttocks in a few years; what’s worse is that, by meeting with various mortgage consultants, you will put unnecessary inquiries on your credit report—which reflect negatively on your credit! So, the lesson here is that the first step in obtaining a mortgage loan is to order your credit score and learn your what your credit rating is. Next, you do one of the following: (a) meet with a mortgage consultant if your credit is in good shape or (b) use your credit report to determine how you can improve your credit score and work on bettering it.

#4 – Following the leader.

Mortgages are often perceived to be complex and confusing. As a result, many people simply “do what they’re told” rather than learn what’s best for them and comparing that to the direction given by a mortgage consultant. Don’t be mindlessly herded towards a specific decision like that. Now, that’s not to say that you shouldn’t listen to your mortgage consultant, just that you should be knowledgeable enough to ask questions about the suggested option and other options. Make sure that you understand the “why” as well as the opportunities and risks of all the options you’re considering.

#3 – Signing blind.

Many homeowners stop asking questions as soon as they get word they’ve been approved for a mortgage; they forego delving into the details of the mortgage because they’re so elated about being approved. Don’t be that person! Take the time to discover and understand the terms of your mortgage before you sign on the dotted line. Review the Good Faith Estimate (GFE) statement

#2 – Maxing out mortgage limits.

Many homebuyers meet with a mortgage consultant and obtain a mortgage pre-approval. Then, they go out and look for a home based on how much they’ve been pre-approved for; they take the pre-approval amount to be what they can afford but in reality, that amount actually represents how much lenders are willing to loan you. So, as a general rule, remember that it’s never good to max out your mortgage limit. Stay conservative when shopping for homes. In fact, use an affordability calculator to determine how much of a mortgage loan you can handle without having to pinch pennies every month. Do this before you start home shopping. That way, you won’t be tempted to buy beyond your means.

#1 – Settling instead of bargain hunting.

Two mortgages may look alike, but that’s not necessarily the case. So as you’re comparing mortgage options, don’t just look at mortgage rates and the mortgage loan type. In addition to the mortgage rate and type, you should also compare mortgage terms, mortgage point options, mortgage underwriting fees, and mortgage broker fees. When you compare two or more loans side-by-side, you’ll see some clear-cut differences.

Don’t just avoid one of the common mortgage mistakes above; avoid them all. If you do, you will be able to find a manageable mortgage, and not only become a homeowner, but stay one!

Brian Jenkins asked:


With the housing market in turmoil after the sub-prime mortgage crisis and the Federal bail-out of Freddie Mac and Fannie Mae, the basic requirements to receive a mortgage have tightened up. According to at least one real estate financier, to get a mortgage these days you”practically have to walk on water”. While this is a bit of an exaggeration, it is true that it’s far harder to qualify for a mortgage now than it was just two years ago. It’s not, however, any harder than it was before 2000, when the real estate market went into hyperdrive. According to many professionals in the credit industry, what we’re seeing is a return to the norm.

So exactly what do you need to get a mortgage these days? Says Patricia McClung, of mortgage giant Freddie Mac, creditors are getting back to the basic three C’s of mortgage lending – credit history, capacity and collateral. Here’s what you need to know about each of those three requirements, and how they’ll affect your ability to qualify for a mortgage in the current mortgage market.

Credit History – Do you pay your bills?

The first C in the mortgage triad is credit history – yours. While having a spotty credit history won’t make it impossible to get a mortgage, it will make it more difficult – and more expensive. Lenders are willing to offer far lower mortgage rates to those with the highest credit scores (760-850) than they’ll extend to those with lower credit scores. The difference can be astronomical. According to June 2008 figures, lenders were offering an average of 5.9% mortgage rates to those in the highest credit bracket. Those in the lowest bracket that Fannie Mae will accept (580-619) were being offered rates of 9.4%. On a $250,000 mortgage, that’s a difference in monthly payment of $588.

In order to be considered for a mortgage by most major lenders, you’ll need a credit score of at least 580, though you may still find some lenders willing to take a risk on someone with a lower credit score, particularly if they really shine in one of the other two C’s. The problem, of course, is figuring out exactly what constitutes a credit score of 580. There are many different barometers, and even the major credit reporting bureaus use different reporting criteria. Essentially, in order to qualify for a mortgage, you should have:

5. no missed or late payments on any credit or utility accounts for at least the preceding 12 months

6. a debt to income ratio of .45 or less

7. the legal ability to enter into a contract

8. no outstanding defaults on credit card or other loans

Capacity – Can you pay your mortgage?

In essence,”capacity” simply means ‘do you earn enough to make the payments on the mortgage you are asking for?’ The typical rule of thumb for deciding capacity is that your mortgage payment should be no more than 28% of your monthly gross income. The debt to income ratio referred to above is another way of determining capacity to pay. Follow these steps to calculate your debt to income ratio:

Add up all your sources of income (before taxes) for the month.

Add up your monthly debt. Include all credit card payments and loan payments, including student loans and car loans. Add in your calculated housing costs, including mortgage, insurance, private mortgage insurance and property taxes.

Divide your debt by your income to get a debt to income ratio.

Over the past several years, the acceptable debt to income ratio has crept up as high as .65, but .45 seems to be the new golden number.

Capacity also can include your savings. Most lenders will require that you have the equivalent of six months housing costs in savings in order to approve your mortgage.

Collateral – What have you got?

The final C in the mortgage algorithm is collateral. In banking terms, collateral is something that you own that will be used to ’secure’ the loan. When you make a secured loan like a mortgage, you are agreeing that if you fail to make payments as agreed upon, the lender can take possession of the collateral and sell it to recover their loan. With a mortgage, the house that you’re buying serves as collateral. If you don’t make the payments as required, the bank or lender may sell the house in order to get their money back.

The amount of the down payment you make is counted as part of the collateral value. While zero down mortgages were not unusual over the past several years, you can expect most lenders to require a down payment of at least five percent of the purchase price of the home. It’s more common for them to require fifteen to twenty percent down on your home. In general, if you put down less than twenty percent on your home, you will have to carry private mortgage insurance (PMI). PMI guarantees repayment of the mortgage if you should default on the mortgage.