February 2010

Smart Moves Toward the Best Mortgage Rate

Whether you need a mortgage to purchase your first home or are simply looking into refinancing your existing mortgage, you absolutely must find the best mortgage rate if you want to make a positive financial decision. Let me help you by providing a few tips:

Shop around for the best rate.

Although we are in tough economic times and it is getting harder and harder to qualify for a loan (especially if you have less than perfect credit), you shouldn’t settle for the very first mortgage that you find. Instead, you have to review rates from various lenders to find the best one for you. After all, financial institutes make a tremendous amount of money off mortgages, so make them fight for your business by bringing you the most attractive offer.

Clean up any credit inaccuracies before you applying.

Since the mortgage rate that you are quoted depends heavily on your credit history, it just makes sense to improve your credit score before you apply. You should pay down as much of your debt as you can, clear up any inadequacies, and make sure you pay your bills on time. By doing this, you will put yourself in a much better position for obtaining the best mortgage rate.

Conduct research about financial institutes and consider all your options.

Currently you can obtain a mortgage rate through a bank and even a private lender. However, to find the best mortgage rate you have to really understand the fine print. A private lender may have the best rate, but you may find that once they tack on all their hidden fees that the rate isn’t really that low anymore. But just because it may be cheaper to go with a traditional bank, doesn’t mean they are going to meet your needs.

Understand the different types of mortgages and their varying rates.

There are many types of mortgages including fixed, adjustable-rate, etc and each one of them offers various rates depending on the financial product. Make sure you understand the rates involved with the various types and choose the type that is best for your personal situation, including monthly payment, loan term, and APR.

If you are a first time homebuyer, don’t miss your opportunity to take advantage of special grants and programs. If you have served in the military, make sure you look into a VA mortgage loan.

Five Ways to Compare Mortgage Companies

Finding the right mortgage for your new home is a big decision, so here are five factors to help you understand which company will work best for you:

1) Fees and Interest Rates

You should always make sure that the fees are appropriate and the interest rates are affordable. Nobody wants to pay fees that they shouldn’t be paying or have an interest rate so high that they can’t afford the mortgage payments. Also, do not be afraid to ask your lender to explain anything that you do not understand on the good faith estimate.

2) Ability to Meet Your Needs

Research whether or not the company has programs that cater to your individual needs, such as low credit scores or low down payment programs. You will need to know whether or not you have poor, good, or excellent credit, as your score will ultimately determine whether or not the mortgage company will give you a loan.

3) Variety of Loan Programs

A good mortgage company will have programs for people that are considered low and high risk. You can check with several different companies to see if they provide helpful loan products such as FHA, VA, and rural development loans. A good mortgage company should also be able to tell you whether a government or conventional loan is right for you.

4) Level of Customer Service

When talking to mortgage companies you should evaluate how the lender treats you as you go through the application process. Do they make you feel comfortable and at ease with providing them your personal information? Are they rushing you and not answering all of your questions? You should always go with your intuition and never choose a mortgage company just because they say that you are approved.

Typically if you get one mortgage company approval, then you will probably be able to get approval from another company, so do not settle on a mortgage company who does not make you feel good about getting a loan from them.

5) Reputation

Find out whether or not the company is reputable. One great way to select a reputable mortgage company is to get referrals from family, friends, or co-workers who have worked with companies that you are thinking about doing business with. You can also search the internet to find out if there are any consumer complaints or lawsuits pending against mortgage companies so you will know who to stay away from.

Online Mortgage Calculators

An online mortgage calculator can be one of the best and easiest ways to help you calculate your various mortgage expenses. It will help you determine what combination of elements must come together in order for you to get the best home loan for your financial situation.

When using a mortgage calculator, keep an eye on the interest rate and the term length you enter as these will greatly influence your results.

Also keep in mind that while a mortgage loan calculator gives you a quick overview and is great for comparing lenders, there are several other factors that will affect your quotes, such as your credit score. So don’t be surprised if you are quoted a slightly higher amount after talking to your lender.

A lender will always provide you more accurate information after considering your current financial situation, including up-to-date interest rates and loan programs. So don’t rely on a mortgage calculator by itself.

Don’t Miss Out on Real Estate Foreclosures

Today’s marketplace offers many property investment opportunities, especially with the dramatic rise in foreclosures. Real estate foreclosures can now be purchased for pennies on the dollar and come in a variety of homes and price ranges (and even timeshare properties).

Low Prices

While the location and nearby amenities will play a role in the overall price of any property, with the current economic downturn, an investor can purchase these properties for a substantially cheaper price.

Typical determinants of price, such as square footage, construction, decor, and property size may not play a role at all in a foreclosure purchase. More often the price is based on what is still owed on the original mortgage rather than its real value.

Variety of Properties

So if you have ever considered purchasing a home, there could never be a better time to invest than now. Prices are at an all-time low, interest rates are extremely low, and high dollar properties are being sold off for substantially less. And with the ever-increasing number of foreclosures, you are sure to quickly and easily find something that is just what you are looking for.