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HOW TO CHOOSE THE BEST MORTGAGE

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Do Your Research

A mortgage is a financial investment which involves a large amount of money, and it is important for you to do your own thorough research before deciding which company you want to go with. While many mortgage professionals are honest, they are looking for a large commission in helping you obtain a loan, and will often look out for the best interests of their job rather than you. Because of this it is crucial to take the necessary steps  to ensure you get the best possible deal.I will share with you the few important steps in the next page.

How Is Your Credit?

The first thing you should do before applying for a mortgage loan is to review your credit report. Errors on your credit history can lead to an increase on the interest rate and cost of the mortgage. This is something you want to avoid. It is also important to understand the terms used in the agreement.

Which Type Of Mortgage?

You should know what type of mortgage you are applying for and how it fits in with your financial goals. Do you want a mortgage with an interest rate which fluctuates, or would you rather have one that is fixed?

Which Mortgage Company?

This is one of the questions you will need to answer when choosing which mortgage company you want to use. You should also know how much money you need to borrow and how much you can afford to pay each month. If there are certain things you don’t understand, you should consult a professional. There are many counseling services which are available to assist you. Like any financial expense which involves large amounts of money, you should shop around to find the best service.

Adding Up All The Costs

Many different companies will have a variety of different closing costs and interest rates. Your goal should be to find the company which offers the best service for the lowest price. Some lenders will try to estimate the cost of the closing, and this is something you don’t want. You want the exact prices, not estimates. If the company can’t give you the exact cost of all the fees up front, it would probably best for you to take your business some place else.

You Can Always Walk Away

It is also important to make sure you aren’t pressured into signing any agreements. Be wary of any lenders who try to get you to borrow more money than you need. If they try to pressure into getting the loan, this generally means they are more concerned with making money than helping you get the best mortgage. Companies like this should be avoided. If you don’t understand certain terms of the agreement, ask that a copy be made of it so that it can be reviewed with a lawyer before choosing to sign it.

Honesty Is The Only Way

Never put false information on your loan application, even if the loan officer urges you to do so. Loan officers who do this should be reported to the FTC. It is also a good idea to avoid purchasing credit insurance which is not necessary. If you feel that you need insurance, contact other companies other than your lender to see what deals they offer. At the closing you should make sure you carefully read the document before signing it. Don’t let anyone rush you into signing it without reading.

If you find that the terms of the agreement have changed, you should have not problem terminating the deal. You don’t want to sign a document which will put you in a financial strain later on. A mortgage is one of the most important parts of your personal finance, and you can’t afford to deal with a unethical lender. Making a mistake when choosing a mortgage can lead to years of financial headaches if you work with a lender who doesn’t have your best interests in mind.

So never rush into making any purchasing decision without doing your homework. Choosing the right mortgage is different from shopping for grocery, any single small mistake will make you be feel tremendously regretful ! Let’s be a smart mortgage shopper !

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mortgage

TEN MISTAKES TO AVOID WHEN BUYING YOUR MORTGAGE

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Avoid These Mistakes

Wouldn’t it be great if everything in life came with a checklist ? But unfortunately, for most of us we have to learn life’s lessons the hard way – by experiencing them and experimenting them ! Fortunately, for home buyers there are some rules of the game that are well known and can help you avoid major pitfalls when buying a home or refinancing your mortgage.

Let’s take a look at ten mistakes below that can have detrimental affect on your mortgage so you can prepare yourself now to get the best terms possible on your next mortgage. Always remember that choosing the right mortgage is not like shopping for groceries, we must be extremely cautious in every decision we make

Not shopping around

Too many people go to their local bank or other financial institution for their mortgage and never shop around. As a result, they end up paying more over the life of the loan because they don’t realize what they could have had. Go to at least three mortgage providers when looking for a loan – make them compete and earn your business!

Using the mortgage broker the realtor recommends

Sure the realtor is the sweetest person you ever met and tells you not to worry because her friend over at ABC Mortgage will take care of you – what she isn’t telling you is that she is getting a kickback for recommending them. Realtors have one goal in mind – to earn commission on the sale. You can often get much better deals by shopping around yourself and saying “no thanks” to the recommendation.

Buying too much house

How many square feet do you need and how much can you afford? Don’t get yourself into a situation where you have too much house that you can’t afford over your lifetime. Remember, it’s not just the monthly payments you have to worry about. You also need to think about property taxes, insurance and heating and cooling costs.

Getting into the wrong mortgage

A quick scan of the newspapers will show you that a lot of people have gotten into the wrong mortgage. Make sure you know the differences between fixed and adjustable rate mortgages and seek the help of a trusted, third party to help you make the right decision. Be sure to review the prepayment penalties as well – why should you be penalized for paying off your loan ahead of time?

Credit

This one you probably already know about, but it is worth repeating again and again. Clean up your credit and don’t make any big purchases right before you go to take out a mortgage. Save the new car purchase or flat-screen TV purchase until after you have signed the loan paperwork!

Borrowing too much

This goes hand in hand with #3. Don’t anticipate future earnings and buy a house you simply cannot afford. Purchase a house you can afford now, even if it may not be your dream house. In a few years, if you are earning more, you can look into buying a bigger house. Start small and work your way up so that you know you can afford your mortgage and not get yourself into financial trouble down the road.

Missing out on programs for first time home owners

Many first time homeowners don’t take advantage of the various programs and discounts available for them. Check into local, state and federal programs that can help reduce your interest rate and potentially negotiate better terms.

Inaccurate information, or garbage in/garbage out

Don’t try and fool the lender – it isn’t worth it. Make sure you have supporting documentation for everything you put down on the mortgage application. Furthermore, never sign a mortgage document in which the lender hasn’t completely filled out all the fields. Insist on honesty on both sides of the desk!

Not locking in the rate

Rates can change in the blink of an eye. Get your rate locked in and don’t wait around until the last moment. Get your rate in writing with the complete terms spelled out from your mortgage lender when you lock it in.

Not considering the other “charges”

Sure, you got a great rate on your mortgage, but did you carefully read about the other charges the lender has stuck in? Rates are important, but make sure you understand the full cost of your loan. Read (and question) all the charges listed. Sure, you might have to pay a quarter of a percent more by going somewhere else, but after you add up all the fees you may find that by going to a lender with a slightly higher rate can actually save you money.

If you could remember not to commit these 10 mistakes, you will be safe in your voyage for searching your best mortgage package. Remember the 10 rules not to be broken !

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