Mortgage rates are probably at an all time low but finding the right mortgage for you can still be a bit of a challenge. With this in mind we have put together a list of 14 things that you can do to help you get the best mortgage for your current salary which will in the end save you both time and money.
1. Check Your Credit Score at Least Once a Year – Checking your credit score at least once a year will help you keep track of any errors that may have dinged your record. Your credit score is one of the main factors that determine your loan approval.
2. Sugar Coat Your Credit Score – Try to clean up your credit rating a little bit by avoiding major purchases such as cars at least six months prior to applying for a loan. You will also want to avoid applying for more credit during this time.
3. Improve Your Debt to Income Ration – This is the amount of money you make versus how much you owe.
4. Lower Outstanding Debts – Try paying off some of the existing debts, preferably the larger ones. If you can find a way to make more money then this can also help you look like less of a risk to lenders.
5. Down Payment – The more you put down on your mortgage the better chance you will have a getting a better mortgage. Most loans require a down payment of 5 to 20% of the price of the home. The up side to putting as much as you can is that you can get lower interest rates and more attractive closing fees.
6. Plan on Sticking Around? – You have to figure out if this will just be a starter home or if you will be hunkering down for the long run. If it’s only a few years, a hybrid loan nets you a lower interest rate than a typical 30-year mortgage.
7. Lower Your Risk – Avoid adjustable rate mortgage loans if you are not comfortable with the unpredictability of the mortgage rates fluctuating or the housing market changing over time. A more traditional 15 or 30 year fixed mortgage may be better suited for your needs.
8. Get Quotes online – Compare rates online for your local market by using sites like bankquotesdirect.com to help you streamline your search for mortgage rates and lenders.
9. Bedrooms – Will your children have separate bedrooms or share? Consider looking for homes with extra rooms that you can grow into.
10. Choosing the Right Lender – The most important thing about finding the right lender is to find one that you feel comfortable with. Call or meet in person before committing because remember you’re going to be working closely with them for an extended period of time.
11. Lock in Those Interest Rates – When you feel confident. Opt to lock in your rate immediately after your application is finished or float your rate until you’re ready to close. You could end up paying less if the market is in a better spot, but it’s a gamble.
12. Be Prepared – Doing your research prior to your house search will give you more knowledge of the process which will in turn increase your house buying confidence.
13. Ask Questions – Don’t be afraid to ask your potential lenders questions. A good mortgage broker should also be able to help you with questions you may have about your mortgage.
14. Be Patient – Buying a house is not the easiest thing in the world to do but equipping yourself with the right knowledge and tools will help your search easier. There are a lot a variables you will have to deal with so it’s best to not let the process bring you down but rather roll with the punches.