Are you getting ready to purchase your first home? Are you already a homeowner who is looking for a better deal on your mortgage? If so, there is always more to learn about getting a great deal on your mortgage. Use the tips below to get a mortgage plan that is fair for you.
Don’t put off a possible new mortgage any longer, or you’re just wasting money. Chances are very good that with a new mortgage, you can pay a significantly lower amount of money every month. Look into all your options, shop around, and then decide on the terms that will suit your budget well, and save you the most cash!
Before you attempt to get a mortgage, it is wise to have a budget in mind. This way you aren’t stuck agreeing to something that you cannot handle in the future. You need to understand how much you can swing each month. Set the price firmly. Don’t let a broker even show you a house beyond that limit. Despite how great that new home may appear, if you are strapped because of it, you will mots likely run into problems.
When considering the cost of your mortgage, also think about property taxes and homeowners insurance costs. Sometimes lenders will factor property taxes and insurance payments into your loan calculations but often they do not. You don’t want to be surprised when the tax office sends a bill and you learn the cost of required insurance.
For some first-time buyers, there are government programs which are designed to help. You may find one that lowers closing costs, secure lower interest rates or accepts those with poorer credit histories.
Although using money given to you as a gift from relatives for your downpayment is legal, make sue to document that the money is a gift. The lending institution may require a written statement from the donor and documentation about when the deposit to your bank account was made. Have this documentation ready for your lender.
If you’ve gotten approved for a mortgage, don’t make any other big purchases until after you’ve closed on your home. Typically your lender will pull your credit once again right before closing. If there are issues that crop up it could lead to problems with your closing. Be smart and curb spending until all is complete.
If you’re paying a thirty-year mortgage, make an additional payment each month. The additional amount you pay can help pay down the principle. If you regularly make an additional payment, your loan will be paid off faster and it will reduce your interest.
Talk to your friends for mortgage advice. The chances are quite good that they have advice for you that will prove fruitful. Their advice can help you avoid pitfalls that they experienced. The more people that you talk to, the more that you will learn.
Pay off your mortgage sooner by scheduling bi-weekly payments instead of monthly payments. You will end up making several extra payments per year and decrease the amount you pay in interest over the life of the loan. This bi-weekly payment can be automatically deducted from your bank account to make it easy and convenient.
Try giving your lender a chance to help you with mortgage payment problems. If you struggle to make payments, do not ignore your lender’s services. There are various new programs to help you keep up with your mortgage payments like forbearance if you have an FHA mortgage. Lenders are generally happy to work out any delinquent loans via loan modifications, or possibly short sales if you can’t afford to keep your home. It can be difficult to deal with them over this, but communication is key.
Mortgage loans that have variable interest rates are not a good idea for most buyers. You really are at the whim of the economy with a variable interest rate, and that can easily double what you are paying. This could result in you no longer being able to afford your home, which you, of course, do not want to see happen.
Look into credit unions. There are many options for obtaining financing and credit unions have their strengths. Often credit unions will hold mortgages in their private portfolio. Banks and other financial institutions routinely sell mortgages to other holding companies. This could result in your loan changing hands multiple times over its lifetime.
Ask your lender in advance what documentation they need before you meet with them. This is usually going to include tax returns, income statements and W2s, although more might be needed. The more time you have to get it all together is the less likely you’ll be unprepared at the actual meeting time.
Do not get confused with wording. Many people do not understand the difference between loans that are pre-approved or pre-qualified. When you are pre-approved a lender is potentially offering you the funds. When you are pre-qualified you are not being offered funds. Instead they are offering you a chance to become pre-approved.
Never choose a home mortgage from a company that asks you to do unscrupulous things. If a rep is asking you to claim more than you make to secure the mortgage, it’s not a good sign that your mortgage is in good hands. Walk away from these deals as quickly as you can.
Whether you are buying your first home, multiple homes or are looking for a better mortgage on an existing property, the right advice on home mortgages is priceless. Remember the tips listed above when you are signing the papers for a home mortgage. This way you will ensure you are making a good decision.
