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Home Mortgage Advice Straight From The Experts

May 12

Home Mortgage Advice Straight From The Experts

Whether you are familiar with the process or you are purchasing a home for the first time, it is still important to find the home mortgage that is right for you. Without the right mortgage you may pay more than you have to, or even face losing your home to foreclosure. This article is full of tips about finding the right mortgage.

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Save enough money to make a down payment. Lenders may accept as little as 3.5% down but try to make a larger down payment. If you put down 20% of your total mortgage, you won't have to pay private mortgage insurance and your payments will be lower. You will also need cash to pay closing costs, application fees and other expenses.

 

Even before you contact any lenders, make sure that your credit report is clean. The new year rang in stricter loan controls so getting your own affairs in order is more important than ever.

 

If you are planning on purchasing a house, make sure your credit is in good standing. Most lenders want to make sure your credit history has been spotless for at least a year. To obtain the best rate, your credit score should be at least 720. Remember that the lower your score is, the harder the chances of getting approved.

 

If the idea of a mortgage looming over your head for the next few decades does not appeal to you, consider refinancing over a shorter period. Although your monthly payments will be more, you'll save a lot in terms of interest over the life of the loan. It also means being mortgage-free much sooner, and owning your home outright!

 

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.

 

Always read the fine print before you sign a home mortgage contract. There are many things that could be hidden inside of the contract that could be less than ideal. This contract is important for your financial future so you want to be sure that you know exactly what you are signing.

 

Try going with a short-term loan. Since interest rates have been around rock bottom lately, short-term loans tend to be more affordable for many borrowers. Anyone with a 30-year mortgage that has a 6% interest rate or higher could possibly refinance into a 15-year or 20-year loan while still keeping their the monthly payments near around what they're already paying. This is an option to consider even if you have slightly higher monthly payments. It can help you pay off the mortgage quicker.

 

You always have to remember that any loan is risky, and a home mortgage means you have even more on the line. You really must get a loan that suits your family's needs. These tips will give you the fighting chance you need to succeed.