7 Essential Mortgage Tips

7 mortgage tips

Learning how to maximize your mortgage benefits is surely something that everyone likes.  There mortgage tips aims to help you get the most out of the various lenders and brokers available in the country.  Education is the best way so that you can have the best opportunity for your family and your home.

Let us share with you the following 10 Essential Mortgage Tips.

Mortgage Tips #1 – Getting a Loan with imperfect credit

You might be worried that you cannot get a loan because you have an imperfect credit score but that is not entirely true.  Do you know that Federal Housing Administration or FHA-insured loans can solve that problem?  These types of loans are appealing because they provide credit to borrowers with lower credit rating.

In 2016 for example, FHA average homebuyer credit score was just around 686.  Also, the average conventional credit score for homebuyers was 753,  If you want to get a mortgage with just 3.5 percent downpayment then make sure your credit score is 580 above.

For borrowers whose credit score is 500 and 579, a down payment of at least 10 percent is required.  Be sure to seek out a lender first that would approve your FHA loan.

Mortgage Tips #2 – Save by refinancing

If you want to save money, you might consider a 15-year mortgage refinance.  This type of refinancing can save you money since most of them tend to have lower interest rates than 30-year loans.  In addition, shortening the loan contract reduces the amount of interest you have to pay.  Of course monthly installment might be higher but it will save you more in the long run.  Remember that there are both pros and cons in this decision thus, consider all of them very well.

Mortgage Tips #3- Borrow what you can pay

One of the golden rules in borrowing and among best mortgage tips is to know your capacity to pay. Try to be conservative about your income and take into consideration sudden events.  It is smarter to live within your means. Follow this conservative rule – all of your monthly debt obligations, including the house payment, shouldn’t exceed 36 percent of your income before taxes.

You can use the calculator below to determine how much house you can afford.

 

 

How Much Income Do I Need by MortgageLoan.com

 

Mortgage Tips #4-No-closing-cost mortgage

Typical mortgages might charge you thousands of dollars in mortgage fees and closing costs.  Most of the time you try to avoid higher interests rates but in truth accepting higher interest rates might be the key.  Some lenders might agree to pay some or all of the closing costs if in exchange for a higher interest rate.

Arrangements like these typically appeals to those who plan to sell their homes within 5 years or so.  However, if you plan to stay longer and even permanently the best way is to pay your fees and closing costs personally.

Mortgage Tips #5-Zero down payment VA loans

Loans from the Veterans Affairs known as VA loans are one of the most underused loans.  Many eligible homebuyers for VA loans were not actually aware that they are eligible in the first place.  These loans are not only available to retirees but also for active personnel on duty.  Minimum requirements for eligibility is completion of at least six years of service in the National Guard or selected reserve units. VA loans are also available for certain surviving spouses of veterans.

VA loans is very practical since it can be used to buy a primary home without a down payment.  Remember these as one of the essential among the mortgage tips that we have here.

Mortgage Tips #6-Know the numbers in your loan

One of the many things that borrowers forget is to know the numbers before they get a loan.  Since this decision will affect your finance and future one of our essential mortgage tips is for you to use mortgage calculators to know things related to your mottgage.  Mortgage calculators are free online tools which tells you things like interest, costs, rates and more.

HMAC provides the following free tools for you:

Mortgage Tips #7-Seek the advise of trusted brokers

If you would be buying a new home and considering what loan options you might have, one of the best thing to do is to consult a mortgage broker for advise.  Home Mortgage Alliance Corporation (HMAC) for example has a wide range of partners which can assist you in your proper decision making.  Be sure that there brokers and lenders have active NMLS numbers and are duly licensed.

HMAC has the following registrations:

  • NMLS License # 1165808 (NMLS Consumer Access)
  • Bureau of Real EstateBRE License Number – 01526821
  • Department Of Business OversightDBO License Number – 603L284

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Reference: Bankrate

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