Once you have decided to join the ranks of homeowners, you need to decide what type of mortgage is right for you. The most conventional choice for home loans is the 30-year mortgage. The 30-year mortgage started to grow in popularity in the 1950s and quickly became the loan of choice. While the 30-year mortgage is still the standard, the 15-year mortgage may be something to consider for new homeowners.
When applying for a mortgage, your mortgage lender will require you to submit many forms and fill out various (never-ending) paperwork. Once of the financial documents you will be required to submit is your bank statement. As you will find below, your bank statement is just as important as your pay stubs and your tax returns when trying to get approved for a mortgage.
Coming up with a down payment for a house is often a worry for want-to-be homeowners. Depending on the type of home loan you intend on applying for, you would need either 3.5 to 5 percent of the purchase price, or the standard 20 percent of the purchase price. So where does that money come from? For most people, it comes from years of savings and hard work, and if you are fortunate enough, a portion might come from gift funds. Perhaps the money was given to you as a wedding gift, or maybe from your parents to help you get started as you head out on your own. Regardless of where the gift funds came from, there are guidelines and procedures that must be followed if you’re using gift funds for a down payment.
Various factors enter a borrower’s decision-making process when it becomes necessary to obtain an ARM (Adjustable Rate Mortgage) or a FRM (Fixed Rate Mortgage) to finance a home purchase or refinance an existing mortgage; and on some occasions, not all factors are known to the decision maker until s/he is in the presence of a bank or mortgage lender representative.