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Mortgage rates can
impact the cost of your home by thousands or, for some, tens
or hundreds of thousands of dollars over the course of a
typical 30 year mortgage. Global Loan Source has
put together a listing of tips and advice that will help
ensure that you are getting the lowest mortgage rate when
you are applying for that new loan or refinancing your
existing loan. With this knowledge in hand, you should feel
comfortable completing our mortgage rate quote knowing that
you are armed with the correct questions to ask and are also
looking for any signs that your mortgage broker or lender
isn't giving you the best deal possible on the financing of
your home.
- How much mortgage can I afford?
- Should you pay discount points?
- Should you use a 'lock-in' feature?
- Adjustable rate mortgages.
- Credit Reports
- Correcting Errors on your credit
report
- When does it pay to refinance?
- Budgeting
- Dealing with Creditors and Collectors
- Is Bankruptcy an option?
 The industry average says your mortgage payment,
including mortgage principle, interest, taxes, and
insurance, should not exceed 28% of your gross monthly
income. The tip: DO LESS. A better percentage is no
greater than 22%. The more cushion the better. Also,
credit card debt, car loans, student loans, etc. count
against the monthly cost percentage. Mortgage companies
don't want that percentage to exceed a total of
36%...including your expected mortgage payment. As you
prepare to speak with a mortgage lender or broker, tally
up your monthly debt payments, estimate your mortgage
payment, and make sure it doesn't add up to more than 36%
of your gross monthly income. Note: The percentage for FHA
loans is 41%.
FREE MORTGAGE RATE QUOTE
When searching for a mortgage, it is generally
wise to search for a loan that has low interest rate
COMBINED with no points and no up-front charges. Reason:
It can take a long time to realize the savings from adding
discount points to your mortgage. Note: You cannot avoid
things like inspection fees, closing costs, etc., but you
can avoid the points.
MORTGAGE RATE QUOTE
When mortgage rates are generally rising, you may
want to consider a 'lock-in' commitment where the lender
promises to hold the interest rate for a period of time
(30-120 day range). The advantage: Your rate is
'locked-in' in case rates go up while you are shopping,
building, or negotiating for a home. The disadvantage: You
won't be able to take advantage if rates go down. Note:
Lender may charge a fee for this service and you may be
able to work in the ability to adjust the rate once during
the lock-in period. Make sure to ask you mortgage broker
about these issues.
FREE MORTGAGE QUOTE
Be careful about adjustable rate mortgages. The
rates look attractive but almost always go up over time..
especially these days. Rates are at 40 year lows and only
have one place to go. Things to consider with adjustable
rate mortgages: Will your income go up over time? If so,
you'll be better able to handle higher mortgage payments.
How long will I own this home? If you don't plan on owning
the home for a long period of time, an adjustable rate
mortgage may be more feasible. BUT, most everyone ends up
owning their home longer than they thought they would.
Again...be careful.
FREE MORTGAGE RATE QUOTE
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Credit reports...You have to love them. Why are
we slaves to our credit report? The fact is, mortgage
companies love them. They present an objective way for a
mortgage broker or lender to track your 'ability to pay'
history. You probably won't be able to avoid having a
mortgage company look at your credit report. The tip: Get
at credit report before you inquire about a mortgage. If
you are worried about your credit report, you may be able
to fix problems before the mortgage company gets a bad
first impression.
As provided for by the Fair Credit Report Act,
Credit Reporting Agencies have a responsibility to correct
inaccurate information. If you find any errors, write a
letter to the company that created the error (i.e. Credit
Card Company) and the Credit Reporting Agencies. Including
any documents that support you position. Explain why you
disagree and request the error be removed immediately.
Mail the letters certified mail so you know each company
received your letter. The credit agencies must investigate
your inquiry, usually within 30 days, and remove any
unchallenged inquiry. When the credit agencies have
completed their review, they must notify you in writing.
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Generally, math with determine whether it makes
good sense to refinance. 'Experts' say its smart to
refinance if today's interest rates are 2 percentage
points less than your current mortgage interest rate. But
beyond that, it's easy to take the monthly savings
multiplied by how many months you plan on staying in your
home versus the cost of refinancing (You'll need to ask
your lender about all of the costs involved). Here is an
example: Say you get a quote for a new rate that will make
your new monthly payment (principal, insurance, taxes, and
interest) $1,400. Your current monthly payment is $1,650.
If your lender tells you that it will cost you $4,000 to
do a refinancing, then you win when the monthly amount
saved is greater than $4,000. In this case, it would take
16 months, at a savings of $250 per month, to EQUAL the
amount you paid in closing/refinancing costs. Anything
after that is a winning deal. If you planned on staying
another 20 years, you will save $60,000 (plus interest) by
refinancing. Do the math, be realistic about how long you
will stay, and you will know whether or not you should
refinance.
FREE REFINANCE QUOTE (refinance)
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Do you have a budget, a real budget? As in an
itemized and structured list of where every dollar goes
(by month). Why? You do a budget before doing debt
consolidation because you need to first figure out if you
spend more than you make. Once you have figured out how to
live on what you make (which can mean really hard
decisions), then you can talk about a plan for reducing
your debt. If you don't budget first, then debt
consolidation will only consolidate your current debt. It
won't have anything to do with the new debt that you will
create by continuing to spend more than you
make.
FREE DEBT CONSOLIDATION QUOTE
Don't avoid the problem. As much as you think
your creditors are the enemy, they are not. After all,
they just want the money they lent to you. The key is to
contact them, be honest about your situation, and ask or
suggest ways for you to get your creditors the money they
deserve. Note: Creditors cannot harass you. They cannot
call before 8am or after 9pm. Sometimes, creditors get
very serious about their money and cross the line. Know
your rights and protect them.
FREE DEBT CONSOLIDATION QUOTE
Hopefully not. It is obviously the last step you
would ever take with respect to your personal finances. It
stays on your credit report for 10 years and can make it
difficult to get a job, obtain life insurance, car
insurance, buy a home, etc. You have 2 options when it
comes to declaring bankruptcy. Chapter 13 bankruptcy is
called reorganization. You get to keep your car and home
under this type of bankruptcy. Note: Chapter 13 doesn't
may not allow you to keep your home when your creditor has
an unpaid mortgage or lien on it.
Chapter 7 bankruptcy is when you
liquidate your assets except those exempt in your state.
Typically those exempt assets include basic household
items, work related tools, etc. In either case, a
bankruptcy will not erase tax obligations, alimony, child
support, fines, and some student loans.
Bottom line...try to figure out another
plan.
FREE DEBT CONSOLIDATION QUOTE
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