Here’s what you should know before applying for a mortgage

“It is the quality of lending over quantity of lending.” – Lewis Thompson Preston

Mortgage loan is taken to raise funds to buy real estate or is taken to raise funds for other financial purposes. The property owned is put up as collateral security against the loan secured which is why it is referred to as a mortgage loan. You can review loan options from some of the best mortgage companies, to understand their term and conditions concerning the lien on said property and the loan in question.

It is, however, vital to keep the following points in mind before venturing to check out options.

What is credit score and how does it affect your mortgage?

• A credit score is a benchmark set by financial institutions to determine whether any person who has applied for a loan is capable enough to repay the same.
• One of the top three credit rating agencies will rate your credit history and provide with a comprehensive report about your transactions, the summary of which will be your credit score.

What are the different sources of availing finance?

• With a number of banking and financial institutions providing ample options for a mortgage, choosing from the same can become confusing.
• However, in reality, there are only a handful of reliable sources and best mortgage companies from where you can avail the said funds.
• Credit unions are a good option to start with since they offer a favorable rate of interest and getting a membership will not be difficult as the stringent conditions have been relaxed to encourage more business.
• Mortgage bankers who specialize in such financial transactions will be a good choice since they work for one specific institution.
• Correspondent lenders make arrangements for the funds to be raised by relying on third-party financial institutions, but are a good source to avail mortgage loans since the same might be transferred to the best mortgage companies and banking institutions.

What is mortgage pre-approval and how long does it take?

• Pre-approval refers to a process of providing necessary financial information to your potential lenders before the mortgage loan can be secured.
• Even the best mortgage companies have a pre-approval process to verify the said application.
• Documents to be provided include social security number for all the borrowers (in case of co-borrowers), bank account information, debt obligations if any, income tax returns, salary and employer information if working in a company, loan particulars before applying for the mortgage.
• The preapproval process will vary and take time depending on the lenders.

Which are the best mortgage companies?

The best mortgage lenders of 2017 are as follows:

• Amerisave Mortgage
• ClearPath Lending
• First Internet Bank
• HomeDirect Mortgage
• J.G. Wentworth Home Lending
• Caliber Home Loans
• Vanderbilt Mortgage
• Jersey Mortgage Co
• Homebridge Financial Services
• 21 ^st Mortgage Corporation
• Ocwen Financial Corp
• Mr. Cooper
• LendingTree
• Pacific Union Financial
• Network Capital Funding Corporation

It is imperative to compare mortgage rates and read the fine print of all scheme related documents carefully before choosing from the best mortgage companies.