3 Steps To Find A Good Mortgage Deal
Welcome to Your Mortgage Center! Are you out shopping for a good mortgage deal? If you are, then there are only 3 things that you need to take a look at and keep in mind. First, do your research well. Second, check the fees associated with the mortgage. And lastly, make bigger deposits.
Let’s take a look at them in detail.
Doing Your Research
There are many mortgage providers and brokers out there that provide excellent deals. And sometimes, they’re even better than your usual lender, bank, or financial institution. Even better is the fact that these guys can even tailor-cut your mortgage plan to make it suitable for you and your situation.
Check The Fees CLOSELY!
I know this is common sense, but I think it’s worth repeating – check the fees associated with your mortgage closely! You need to understand and more importantly, accurately calculate the fees not just on your mortgage but with everything related to it. This is a crucial step you should take before grabbing a mortgage deal.
Bigger Deposits Bigger Benefits
You want your lender to feel safe about lending money to you and to give you as many options as you want. And the perfect way to do this is to make a large deposit. A good figure is about 25% or more of the total mortgage. This almost guarantees more options.
Shopping for a Mortgage in Today’s Market
Shopping for a Mortgage in Today’s Market
What you can do to be a good mortgage candidate.
With today’s changing mortgage market, lending requirements have gotten stricter. Bottom line, for those with less-than-perfect credit, it’s harder to get a loan now than it was a year or two ago. Here are some things you can do to improve your attractiveness to mortgage companies and be a smart shopper.
Improve your credit score
Six months or so before you’d like to buy a house, check your credit score. Go to www.annualcreditreport.com and pay the small fee to get your score, along with your free report. If your score is below 700, you may want to improve it before applying for a loan. Check for errors; make your loan and credit card payments on time, every time; pay down your credit cards, but don’t close them.
Increase the size of your down payment
A down payment of at least 10 percent makes you a more attractive borrower to lenders because the lender assumes less risk if you default on the loan. When you’re figuring out what price home you can afford, be sure to take into account how much you can afford to put down. Our home affordability calculator can help you get an idea of what you may be able to afford. http://www.getsmart.com/loan-resources/Mortgage-calculators/What-price-home-can-I-afford.aspx
Lower your debt-to-income ratio.
This refers to the percentage of your gross income you spend on housing and recurring debt. Lenders use this calculation to determine your risk. In general, lenders consider borrowers with more than 36 percent of their income going towards housing and recurring debt to be a higher lending risk.
Shop around.
A good idea in any time, comparison shopping is particularly useful in a tighter mortgage market. Lenders’ policies and lending guidelines are all different, so you may be able to get better terms and pricing simply by talking to more than one lender.
Include a loan contingency in your offer contract.
A loan contingency simply states that your offer to buy the house depends on your ability to obtain financing. In a hot housing market, home buyers will sometimes not include that contingency in order to make their offers more attractive to sellers. It can be a good idea to give yourself an out, just in case your financing falls through.