Top 10 tips to help your mortgage along!
August 4th, 2011
Anything related to dealing with mortgages can give people a head spin. But what do you do when you have acquired one or about to apply for a mortgage loan?
To save yourself from the conundrum of stress and panic when dealing with mortgages, here are the top ten tips to help you hook the best possible mortgage loan out there!
Number 1: The golden rule to mortgages is to ensure you have an appropriate credit score. Previously a credit score of 720 was applied to the better mortgage loans. Now however this number has been bought back to square one, requiring the best mortgage loans to have a 740 credit score.
Number 2: It is essential to maintain and protect your credit at any cost! Having multiple credit inquiries will result in your credit score falling therefore it is important to shop around for an appropriate mortgage loan. The more often your credit report is inquired about, the more your score will drop thus researching beforehand is critical.
Number 3: When making any big decision, it is always smart to weigh up your options and look around for what’s out there which will best suit your circumstance. As usual, the interest rate is a critical aspect to consider but there are also other factors to be considered including discount points and the type of mortgage loan. When searching for the best rate, compare the mix of discount points on offer and the total fees and monthly repayments you would be making under three or four different type of loan deals. By doing so you can immediately rule out several options that you had previously considered.
Number 4: Most individuals, when refinancing, restart from the very beginning, arranging their payments so that the loan is repaid over 30 years. This is a very meticulous and draining task. Therefore when refinancing a 30 year loan which you’ve had for 5 years, pay off the new loan in 25 years. Request to your lender to remunerate the loan for the remaining period of the old existing loan.
Number 5: The biggest and most intimidating aspect of acquiring a mortgage is the debt associated to it. Hence it is fundamental to know your borrowing limit and set this as a standard to which you will abide when shopping around. When doing so, the Federal Housing Administration can act as guide for how much debt is appropriate and payable by you.
Number 6: If you’ve been in a position where you believe you can’t refinance because you have the positive equity but you don’t have enough cash, than it’s time for you to rethink! You may just be able to refinance the mortgage using a little out of pocket expense however in a no closing costs refinance.
Number 7: Often lenders require borrows to have 10 percent equity at the very least which effectively eliminates several refinancers and borrowers. However there are options for those people out there who have minimal savings and equity. If you have good credit, you are able to make small down payments (equity) of approximately 3.5%.
Number 8: If you happen to have a smaller loan then you are able to act early. For loans of $100,000 or less, you are less likely to be chased by loan officers as they tend to track down those with larger sums. Given this, you are able to repay your mortgage faster with minimal threat of being chased up by loan officers.
Number 9: Making extra payments every now and then is a great way to help put your mortgage repayment seem a lot breezier. If at anytime during the year you are able to make consistent frequent payments, you will effectively shorten the period of your repayment.
Number 10: Finally if you are falling behind on your mortgage payments it may be a good idea to access counseling services which ultimately help you to receive a slight modification on your mortgage which results in a reduced payment!
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