Mortgage regulations have changed significantly over the last few years. We have gone from restrictive guidelines with few options to the market and loan options opening back up.
Get the Right Information
Whether you are getting ready to purchase your first home, move to your next home or buy an investment property it is crucial that you get informed on the latest factors that guide and regulate your purchase.
Research has revealed 6 common mistakes most homebuyers make when shopping for a mortgage. These mistakes can have a large impact on the actual cost of having a mortgage and if avoided can save you a lot less over a shorter period of time.
5 Things You Must Know Before Obtaining a Mortgage
Before you commit to your next mortgage consider the following
1. You should get preapproved before you go looking for a home.
The pre-approval process is easy and will give you confidence when looking for a home. It can be accomplished over the phone and you local lending institution will provide you with a written pre-approval. In Arizona, most sellers require a form provided from your lender that states you have began this process. You have heard the term as good as cash, well this accomplishes that. It is like having the cash in the bank, it entails a complete credit application and guarantees you a mortgage specified for you when you find the home you are looking for.
2. Know you monthly mortgage payment you are comfortable with.
When you are obtaining your pre-approval, discuss with your lender what amount you are comfortable paying and what you actually qualify for. The two can be different amounts. By working with the lender you can establish the amount you want to pay and value that equates to at today’s rates. This way you wont waste time looking at homes that are outside your price range.
3. You should be thinking about your long-term goals and income situation to determine what type of mortgage will best suit your needs.
There are a number of different types of loan programs so you should be asking your self several questions before deciding. What is the short and long term outlook on your income, will it go up, down or remain the same? How long do you plan on owning this home? What are the interest rates now and what is expected in the near future? Answering these questions will help you discover the mortgage that best suits your needs now and in the future.
4. What are the mortgage pre-payment options and frequency privileges available to you?
Increasing the frequency of your payments, like paying twice or month, or weekly can cut years off your mortgage. Simply by structuring you payments more frequently well lessen the amount of interest you pay on your mortgage. Likewise, increasing the amount you pay or authorizing a certain percentage of prepayment of your mortgage will lesson the amount of interest you pay. These methods can cut many years off the total years you pay. However, not all mortgage programs have these privileges so make sure to ask the proper questions.
5. You should seriously consider working with a Mortgage expert.
Consider working only with a professional who specializes in mortgages. They are familiar with the changing procedures, timelines, and obligations in a Real Estate transaction/contract and can help keep the purchase transaction smooth and hassle free. A great mortgage specialist working with a professional Real Estate agent as a team can position you to save you money and make a better purchase. Ask me how this can save you $1000’s to $10,000’s of dollars on your next purchase.