Upper Peninsula, Michigan Mortgages

A mortgage is a long-term loan that is normally backed by the equity (value) of your home.  You pay interest on a mortgage, and the interest rate varies depending on your credit and the type of mortgage you receive.  Some Upper Peninsula mortgages have fixed rates, usually for a 15, 20 or 30 year term, others have a rate that adjusts after a shorter fixed-rate period.


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Mortgages Introduction

There are lots of different sources out there (banks, credit unions, mortgage brokers, Internet services, etc.) and you should evaluate a few to truly locate the 1 is the best for you. Different Upper Peninsula lenders offer different rates, so it helps to shop around. You can use a mortgage broker as well. They can often offer better rates than you can find yourself, and will assist you in sorting through your options. Mortgage brokers are paid by the lending institution offering the loan.

Items you'll require to qualify

IRS W-2 forms

Income tax returns (for the past few years)

Any alimony or child support payments (paid or received)

Bank statements

Pay stubs

Credit report - It is in your best interest to request a copy of your own credit report in order to study prior to lenders do. It is estimated that almost 80% of credit reports hold errors, so this gives you an opportunity to rectify them before you apply for a loan, as well as take basic steps to boost your credit score.

What points are

A point is 1 percent of the loan amount, and lenders can charge from 1 to many points on a loan. Points are paid as part of closing costs. Discount points are prepaid interest; the greater number of points paid at closing, the lower your interest rate will be. Origination points are basically just a fee to cover the lenders cost of making a loan.

Discount points are tax deductible, but origination fees aren't. When choosing between loans with points or no points, consider how much money you have available for closing, and the length of time you intend to own the home. If you do not have a good deal of money for closing, a loan with no points will require less money up front. If you plan to live in the home for an extended time, a lower interest rate will eventually be better for you. You can request the seller to pay the points as part of the purchase agreement; go along with paying the points, you still claim the tax deduction.

Credit Reports

Upper Peninsula lenders will ask for a copy of your credit report when your loan application is taken into consideration. This report gives all the details about your financial history, payment records, total debt, and any bankruptcies.

The information on this report is used to determine your credit score or FICO score, a numerical rating of your creditworthiness. Credit scores range from 300 to 900, with a large amount of people falling somewhere between 600 and 700. The higher your credit score, the more plausible they will offer you good rates and loan terms. Factors affecting your credit score consist of the number and frequencies of your delinquencies, the length of your credit history, and a review of your credit limits.

Close unused credit card accounts.

Resolve any outstanding accounts, Confirm all listed account numbers to make sure they are yours. Check your loan balances and late payments.

You might be required to explain certain items to lenders.

Pre-qualification and Pre-approval

Pre-qualification is an estimate of how much mortgage you can afford. The entire process might take only minutes or a few hours at most, and is as a rule free. While a pre-qualification is non-binding to the lender (because the information you provide to them has not been verified), it does serve as a good indication to potential sellers of your general creditworthiness. Pre-approval takes pre-qualification 1 step further. To get pre-approved takes more time. The Upper Peninsula lender will contact your employer, your bank and others to confirm your income, assets, debts and credit history, and then send you a letter stating that your mortgage is approved for a specified amount within a certain timeframe. This process generally costs a small administrative processing fee that is often refunded at closing.

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