When you are shopping for a mortgage, there can be a great deal of angst and uncertainty because it can be a long and arduous process. Use the five tips of this article to help you get through the process easily and smoothly.
The thing to know when shopping for a mortgage is what your credit reports say. You can get a free copy of your credit reports at www.annualcreditreports.com. You get a free copy from each of the three credit bureaus: Experian, TransUnion, and Equifax. It is also advisable that you pay to get your credit scores. Many times there can be wrong information on your credit report and you may need to work on getting it removed. You can see where you may need to pay down debts or work on your credit. The higher your credit score is, the better the rate on your mortgage you will receive. Thus, improving your credit will help you save more in the long run because you will reduce the amount of interest that you have to pay.
The next thing to know is what kind of fees the mortgage broker will charge. You do not want to go with the first mortgage broker who you talk with but rather talk with three or four about what kind of costs will be incurred for completing a mortgage. You should receive a sheet from each mortgage officer about how much it will cost to do the loan. Compare these to find the lowest one as this will help you save more as well.
The third thing to look for is whether you should get a fixed rate loan or an adjustable rate loan. This will be partially determined by how long you plan on living in the house. If you plan on living in the house for only a few years because you are fixing it up, an adjustable rate mortgage can be beneficial because the rate often is slightly lower than the fixed rate mortgage. Many people have had trouble refinancing when the adjustable rate kicked in so talk with your mortgage brokers about the pros and cons of both types.
The fourth thing to look for is whether you have any prepayment penalties. Some mortgages may have a penalty if you pay it off early. Your goal should be to pay off the house loan as early as possible so that you can save more by eliminating as much mortgage interest you have to pay as possible. Prepayment penalties often are found on adjustable rate mortgages.
The fifth thing to look for when shopping for a mortgage is to work with someone you enjoy working with. You have to push to keep costs down as much as possible but the mortgage process goes so much more smoothly when you work with someone who is efficient and you enjoy working with.
Shopping for a mortgage is a long process. Give yourself enough time to use all five of these tips and you will be much better off down the road because you can save more and have the mortgage paid off sooner.
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