How to Get a Mortgage in Maine

After deciding to purchase a home, the first step in the purchasing process is getting a home mortgage loan. If you are unfamiliar with the term mortgage, it is basically a loan used to buy property. The following are the steps one should take in getting a Maine home mortgage loan.

Difficulty: Moderately Easy

Instructions

1. Review your credit report of mistakes and clear them up before applying for a loan.

2. Know that in Maine, mortgage brokers are required to be licensed and carry a $10,000 bond. Ask for proof of their license.

3. Be knowledgeable of state and local lending laws that apply to predatory lenders (lenders that intentionally coerce consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit). For example, Maine has the Maine Predatory Lending Law that applies to predatory lenders that engage in high-pressure sales tactics, harassment in collection, or trick a borrower. Fines and punishment can be levied.

4. Explore various Maine and federal homeownership assistance programs. They are offered to veterans, disabled, low-income buyers, single parents, senior citizens, and rural home buyers, and include programs such as Maine Housing's First Home Program, the Maine Assist program, and the Purchase Plus Improvement program.

5. Interview different lenders, like mortgage brokers (individuals and agencies that arrange financing from a variety of lenders), credit unions, banks and online brokers. Look for the best rate and terms possible.

6. Try to avoid from Adjustable Rate Mortgages (ARM). ARMs move the interest rate risk from the lender and onto you. If interest rates rise so will your mortgage payment. If interest rates fall, your payment will stay the same or decrease slightly.

7. Get pre-qualified with the lender of your choice. The lender will ask for documents such as pay stubs, investment information, and tax returns among others.

8. Find a reputable, local real estate agent. They will assist you in finding a home that fits your needs and budget.

9. Finalize the loan transaction with your lender and put an offer on your desired home.

10. Pay all legal, realtor and closing fees, and move in to your new home. The lender will be in contact for payment within a few weeks.
    

Tips & Warnings

• In shopping for interest rates, realize that even one quarter of a percent can mean thousands of savings over a 30-year mortgage.
• Do not be pressured into buying a home you don't want, the realtor may have an ulterior motive.
• Get your potential home professionally inspected. Find problems before the deal is finalized.
• Before you sign anything, be sure you thoroughly understand all the terms of the contract.
• Never pay anyone to apply for a loan. Reputable lenders do not engage in this practice.
• Be sure that the title of the home is clear of liens before you purchase it.
• Record low interest rates of the recent past have led to an explosion of unethical lending scams. You may wish to have a lawyer review any documents before you sign them.