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Home Loan To Get Your Dream House
One must have careful and in depth study of the home loan process before getting into it. It will not only demystify it but also enable him to get the best home loan plan. When you decide to get a home loan to finance your dream home, there are a few procedures you have to follow. You will have to provide the lender with various documents such as include tax returns, salary statements, employment verifications, bank statements and such.

All these documents will be scrutinized meticulously by the underwriter. He will take a week or ten days to complete the initial appraisal. After that he can ask you for further documentation or even disapprove the loan if he feels you are a bad investment. If the initial documents have been approved, provide further documents and wait a few more days.

The entire loan process can even take a month to complete. If the person has a bad credit history or self-employed, the process can even take longer. If the loan has been conditionally approved by the underwriter, it is then sent to your attorney or the title company. Either of these two parties will add to the list of documents, any further information needed.

Once you submit all the relevant documents, you will be called for an interview with your attorney or the title / escrow company. You will be given a copy of all the relevant papers to study. Then you will have to sign on original documents. A couple of days later, the home loan amount will be transferred to your account. Once it is recorded with the county, the transaction is complete and you can happily purchase your home.

Getting a home loan with poor credit rating can be difficult or even at times impossible. Unscrupulous lenders will exploit peoples desperation to own a new home and give them a home loan even with poor credit at high rates, fees and penalties. Very often, these people will end up being unable to pay the home loan over and above their other loans and lose the home to foreclosure. Those who have bad credit and still want to get a home loan can avoid these pitfalls by taking a few sensible precautions.

Some of these precautions are:
Check credit rating with credit bureau - a rating of below 620 is bad credit.
Raise credit score by paying off overdue debts and credit card dues.
Consider exactly how much you can repay comfortably by way of a home loan.
Save for sometime to get enough to make a large down payment.
Bad credit will attract higher interest rates, so check these.
Track all extra costs like points, closing costs, penalties etc.
Get someone with good credit rating parent to cosign the loan.
Do not get ARM where mortgage amounts can increase drastically over time.
Search for a good FRM with fair fees and lowest possible interest rates.

People with good credit rating and enough confidence and finances to opt for an adjustable rate mortgage can use a mortgage calculator to calculate ARM rates. The ARM mortgage calculator can help you calculate adjustable rate mortgage figures. It can even help you compare these figures against those of a fixed rate mortgage. You have to input into the calculator the details such as interest rate, loan amount and period of ARM. Since with adjustable rate mortgages, the interest rates keep fluctuating depending on market trends, the figure entered for the calculator will be the initial interest rate.

Though you cant predict future interest rate, you can still use ARM calculator and input different interest rates to check what your liabilities can be. Apart from the conventional figures, you need to input other details like period of initial interest, margin, index, lifetime cap and expected interest adjustment amount. If you are not clear about what these parameters are, take the help of a real estate agent or go through the loan documents. Understanding the home loan process and using mortgage calculator can help a person to a great extent to acquire his dream home.

Article by John Hoots of Chicago, who is a specialist in real estate investments. For more information on Chicago home loans, visit his site today.


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