7 Secrets for Securing a Smart Mortgage

7 Secrets for Securing a Smart Mortgage

smart mortgageSome try as hard as they can to get approved for a mortgage with no luck. Others have attractive offers of interest rates lower than what most realize is available. Then there is the vast majority of the population who is able to get approved, but with a less desirable rate. Don’t assume you will be stuck with a bad rate or blindly accept the terms presented. There are secrets to securing a smart mortgage.

  1. Get a Few Quotes – You always want to obtain multiple quotes before making your decision. Lenders expect you to do this so don’t feel bad! In face you want to tell them you are shopping around, so they will be as competitive as they can be with their quote.
  1. Pause for a Larger Down Payment – Are you in a huge hurry to move? Of course, now that you have decided to buy a house you probably want it done right now, but sometimes you are way better off just to wait until you have a little more saved for the down payment. It is always best to put at least 20 percent down.
  1. Browse the National Association of Mortgage Brokers – You will likely hear some say you don’t need a mortgage broker or that they are not worth the money. In most cases, the people who say this have rarely even spoken with a broker. Working with a mortgage broker who will do all the comparison shopping for you can help you get you the best rate that you qualify for.
  1. Build Your Bank Account – Lenders want to know that you have thoroughly thought through your decision to buy a home. One easy way is to increase your savings account and provide the documents showing weekly deposits. This will prove you are responsible with money and you have a plan in case an emergency arises.
  1. Reduce Debt-to-Income – If it already looks like you spend more than you make on bills, a lender will be very cautious in extending you an offer. In most cases, they prefer DTI under 43 percent. Their goal is to make sure a mortgage payment does not take up more than 28 percent of your monthly income.
  1. Consider Local Lenders – You may assume the big name lender with the jingle stuck in your head is the way to go, but this is not always the case. Local credit unions and other smaller lenders will often be quite comparable in an effort to support members of the community.
  1. Explore Government-Backed Options – You are probably already familiar with the Federal Housing Administration but there are other government backed programs you may find helpful, too, such as U.S. Department of Veterans Affairs and USDA Single Housing Guaranteed Loan Program.
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Finding the right lender and mortgage may not be as exciting as actually shopping for a home, but it is just as important. Take the time to shop and compare quotes and lenders, and don’t be too disappointed if it looks like saving up a little while longer will get you the most attractive mortgage.

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