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Mortgage Loan- How and where to get a mortgage loan?

EIn the current economy, considering a high unemployment rate and foreclosures, is buying a house a good idea? Of course, it depends of your personal situation, but considering that mortgage rates for fixed rate mortgages are at their lowest, house prices have fallen at a record level and there is a credit for first time homebuyers, it may be a good time to become a homeowner. If you decide to buy a house, the next step is getting a mortgage loan.

When buying a house it is very important to find the right mortgage loan. There are a number of questions you should find the answers to before applying for a mortgage:

1.What kind of mortgage to get?
2.Where to get a mortgage?
3.How much you can/should borrow?
4.How much down payment you can afford?
5.How to apply for mortgage?

1. There are two types of mortgages :

Fixed rate mortgages and adjustable rate mortgagesFixed rate mortgages are for people that want to know upfront how much money they will be paying every month for the life of the loan.

Adjustable rate mortgage have payments that will vary with interest rates, it can potentially go higher or lower and monthly payment will be adjusted accordingly.

 2.Where to get your mortgage?

When looking for a financial institution for your mortgage needs it is very important to check with different lenders in order to find one that has rates and services that will work with your personal situation. There are several options:

• Banks
• Mortgage brokers
• Credit Unions  
• Saving and loan Associations

Banks are the most common place to get a mortgage loan. The majority of people apply for a mortgage at the bank where they have their checking/saving accounts.

Mortgage brokers are another option. Sometimes they can offer better interest rates because they have access to a large number of mortgage lenders.

Credit Unions (if you are a member or can become a member) are also a good idea since their rates are usually lower than bank rates.

You may also want to check with savings and loan associations,

 3.How much you can/should borrow?

Mortgage lenders recommend that your monthly mortgage payment: principal, interest, taxes and insurance be less than 30-33% of your monthly gross income.

Also, this percentage can change a little bit based on the type of mortgage you choose and the area in which you're looking to buy a house.

(Many banks and mortgage lenders offer mortgage loan calculators on their websites –to find out how much you can borrow

 4.How much down payment you can afford?

Of course, a bigger down payment has advantages when applying for a loan. Not only will it make it easier to receive a mortgage loan, it will also lower your monthly payments.

Most lenders, depending of the type of the mortgage, will require at least 5-10 % of the amount of mortgage as a down payment. (Remember, you will also need money to pay for closing cost)

5.How to apply for a mortgage?

When applying for a mortgage, be patient, make a list of documents that you will need, read everything before signing it.

Mortgage applications require a lot of information and documentation from the borrower and co-borrower, if it is a joint application:

Personal information that includes:

• Name 
• Social security number 
• Date of birth 
• Current address
• Phone numbers

  Income verification:

• Most recent pay stubs (usually for the last 2 months)
• Information about your employee- the names, addresses, phone numbers and your title/position for the last 2 years

  Tax information

• W-2 forms and tax returns for the last 2 years

 Bank accounts information- for the last 2 months (account numbers, balances)

 Information about other assets if it applies (such as an IRA, Roth IRA, etc…)

 Personal property information if it applies (furniture, cars, collectibles, etc...)

 Credit information:

•  Names of all creditors
• Amounts of monthly payments
• Total amounts due on all current loans

Contract and deposit information, including a signed copy of your sales contract that shows that you and the owner have accepted your offer and receipt for the earnest money deposit toward the property.\

If you are self-employed or a student you may need to provide additional information .

 Considering the recent situation in the mortgage lending industry, lenders may ask for additional information/documentation.

If you have any questions or need more information you may want to call few banks/credit unions, they offer no obligation consultation.

What are the benefits of having your own home?

hThere are a number of benefits that come with having your own home –financial and others


1. Homeownership reduces the federal income taxes you pay. You can deduct the interest on your home mortgage and property taxes you pay on your home on the tax returns you file each year.

(Every year you will receive Form 1098-Mortgage Interest Statement with your federal identification number that shows mortgage interest paid and real estate taxes paid- that is an amount that you can deduct on your federal tax return)

2. If you choose a mortgage with a fixed-interest rate, you'll pay the same mortgage payment each month for the life of the loan. This offers you stability and a better way to budget/plan your financial future.

3. Homeownership is a way to build your long-term financial security. (If you choose the right mortgage, not only you can deduct interest and real-estate taxes from your federal tax return, but you will be paying for the principal amount you owe –building your nest egg)

4. If it is your own home, your children (or whoever you chose) can inherit it in the future. Not only are you creating financial security for yourself, but for the next generation.

There are other benefits that homeowners enjoy: memories that you create for yourself and other family members, ability to change/ to remodel if there is a need or desire to do so, involvement in the neighborhood, etc….

Where to look for and how to find a job

In the current economic crisis, when more than ten percent of the working population is unemployed and companies are downsizing or not hiring, it is not easy to find a job. For this reason, it is very important that you are well prepared to look for and find a job.

Where to start when looking for a job;

• Networking: Ask family and friends if there are any openings where they work
• Local Newspapers and Magazines
• Online Advertisements
• Job Fairs
• Governmental agencies/jobs

Your resume should be nearly flawless so take time to work on it.  It should include :

• your personal information,
• your work experiences (paid and unpaid)  
• your education (degrees and majors)

Additional information such as certificates, licenses, awards, training, performance appraisals/ratings/awards, etc… should also be included.

Currently, it may be most helpful to apply for governmental jobs.

If you are looking for a Government job,

1. you should search USAjobs.gov (or CPOl) This is the official jobsite of the U.S. federal government, and allows you to search jobs by :

• · agency
• · location
• · occupation
• · keywords

2. go to –MyUSAJOBS and create an account

3. post your resume on line

4. apply to federal government jobs

You can leave your resume in the Resumix database and you’ll simply have to fill out the self-nomination when you see a job you like. Your resume will be ready to go.

After you located a job announcement you would like to apply for make sure that you read the following sections very carefully:

Overview

Duties

Qualifications and Evaluations

 Benefits and other info

 How to apply section

 According to the USAjobs website:

"Once this announcement closes, candidates will be evaluated using an automated system, (Resumix) which compares your skills and experience as described in your resume with the requirements of the position. If you are found to be a highly qualified candidate, you will be referred to the selecting official for further consideration. (In some cases, individuals with priority for special consideration must be considered and selected before other candidates.) Whether or not you are contacted for an interview depends upon the location of the position and the judgment of the selecting official. You can view the status of announcements that you applied for through our automated response system, ANSWER, accessed through our Civilian Personnel On-Line web page."

This is very important:

Since it is an automated system (Resumix) that compares your skills and experience with the requirements of the position make sure that you are using appropriate keywords in your resume (assuming that they apply to you).

Also, if you are required to send /provide additional documents such as:

Transcripts

Proof of citizenship

Essays

The questionnaire

Declaration for Federal Employment

Make sure that you mail it at least 1 week before deadline, and preferably before the first cut off date posted in the announcement.