Whether it is your first house or your tenth, you need to know everything about mortgage. This might be your biggest loan and therefore it is very necessary to take what you can handle. The ever increasing interest rates on mortgage may reach 4.5% by the end of this year. Some of the useful tips for mortgage are discussed below.
- Have a clean record: lenders like to have borrowers with a clean record. When you are planning to apply for mortgage, try to maintain a clean record of your dues and payments. Borrowers with an income to credit ratio of 36% or less. You will be awarded mortgage if the lenders find you reliable enough.
- Save for down payment.
There are mortgage plans that demand a high down payment as much as 20% of the total cost. It is good to save for the down payment and make a huge chunk of down payment. This makes the future episodes of mortgage easily manageable. There are down payment assistance programs as well.
- Preapproval is the best.
It is best to seek a preapproval for mortgage. It will show you exactly where you stand and will set realistic expectations for you. You will know how much you can afford and then can target the houses that fall in your budget bracket. Usually a person is allotted three times his gross annual income.
- Search for a good lender.
You cannot expect to land with an ideal lender the very first time. You need to search the market and then decide which lender suits you the best. Searching also lets you know the rates of different lenders. This will help you in avoiding any traps that might come with some nasty lenders.
- Research loan types.
You need to put an extensive research for this. There are all sorts of loan plans available. You need to consider your situation, your future plans and then decide which type of mortgage plan might be suitable for you. If you plan to stay in the very house for a long, long time, you might want to opt for a 30 year payment plan. If you want to move out within 10 years, you might find adjustable rate mortgage might be best for you. There are also jumbo loans which are for people who want to go for luxury property.
Here is my Cottage which we secure for our client by working through mortgage