Amazing Mortgage Loan: An unfortunate misconception of mortgage financing is that in order to qualify, one needs to possess perfect credit. But this is far from true – many lenders are happy to work with those with less-than-ideal credit and even offer programs specifically for people with poor credit histories.
Are You Searching for a Home and Worried about Your Credit Score? Here Are 10 Tips That Will Help Get a Loan and Save Money.
Amazing Mortgage Loan
1. Check your credit report and score.
Before applying for any loan, it is wise to first review your credit report. By doing this, you will gain insight into where your credit currently stands and identify any red flags which need addressing. AnnualCreditReport.com can provide free copies of this report.
2. Get pre-qualified for a loan.
Pre-qualifying for a loan provides you with an estimate of how much money is available to borrow at what interest rate. It is important to keep in mind that pre-qualifying for a loan differs from pre-approval in that pre-qualification is only an estimation whereas pre-approval means you have been approved.
3. Shop around for the best interest rate.
Interest rates vary significantly among lenders, making it important to shop around and compare rates before selecting one. Websites like Bankrate.com provide useful tools for doing just this.
4. Consider an adjustable-rate mortgage.
If interest rates increase in the future, an adjustable-rate mortgage (ARM) could provide relief. With an ARM, your interest rate remains fixed for an initial set period before gradually changing afterward.
5. Put down a large down payment.
If possible, make a larger down payment on your home. This will reduce the interest charges over time and help save you money in fees and penalties.
6. Get a shorter loan term.
If possible, secure a mortgage with a shorter loan term – such as switching from 30-year mortgage to 15 or 20 year loans – which will increase monthly payments but save money over time in interest payments. While this might increase monthly payments more significantly, you could actually end up saving money overall as interest payments reduce over time.
7. Make extra payments.
Make extra payments. Whenever possible, make extra payments on your mortgage loan to speed up its payoff and reduce interest costs. Doing this can save you money in both areas!
8. Refinance if rates drop.
Consider refinancing your mortgage if interest rates drop significantly.
If interest rates drop after you obtain your mortgage, consider refinancing to take advantage of lower rates to save both on monthly payments and in the long run. Refinancing could result in savings for both monthly payments and long term.
9. Avoid private mortgage insurance.
Private mortgage insurance (PMI) protects lenders if you default on your loan. If your downpayment falls below 20%, PMI may be necessary; however, there may be ways around it, such as getting a piggyback loan.
10. Be aware of the fees.
Understand Your Fees. Before signing a loan agreement, be aware of all potential fees that could apply such as origination, points and appraisal costs. Make sure your lender provides a list of these potential charges so you can easily compare different lenders.
Also refer to interesting post on 10 Amazing Mortgage Loan Tips to Help You Save Money