Are you looking at mortgage loans? Perhaps you’re buying your first home. Or maybe you need a bigger house for your growing family. On the flip side, you might be looking to downsize your empty nest. No matter which way you cut it, you might need a mortgage loan.
You’ll often get the best rates when you have a high credit score. Making sure that you keep debt levels low and pay bills on time can help you boost your credit score. With high credit, you can work with the banks with lowest interest rates mortgage loans. You might secure the best base rate today, thus keeping costs low.
Speaking of costs, you should make sure that your mortgage is affordable. Generally speaking, you’ll want your mortgage payment to equal 25 percent or less of your monthly income. If your mortgage payments are more than 25 percent of your income, you may struggle to pay your bills and other costs.
You should also get multiple quotes from different companies. One company might beat home loan rates offered by another company. So make sure you check around town and surf the Internet to find banks that do mortgage loans.
Pay close attention to the interest rate, closing cost fees, repayment conditions, and other factors. A bit of extra work now could save you from some serious headaches later on.
You might think that mortgages are a relatively new concept but in reality, they have been around since, well, the idea of private ownership! As far back as ancient times, humans buy and sell their homes by using mortgages. In ancient India, for example, the Code of Manu stipulated fair mortgage practices and forbid unfair ones. Though much has changed since antiquity, mortgages haven’t gone anywhere. If anything, mortgages have never been as prevalent or as important.
Aspiring homeowners spend a lot of time and research when finding the right home, including of course finding the best mortgages to finance it. There is a lot to sift through and consider when deciding on a home loan. From national mortgage companies to local mortgage lenders, each mortgage deal is different, and even the smallest of differences make a ton of difference. In order to better prepare any prospective home buyers out there, here are three tips on how to secure the best home loans.
- Have a Strong Credit Score: According to the Home Loan Learning Center, a good percentage of home mortgage lenders seek a credit score of at least 680 (or 620 for federal housing). Having a good, error-free credit score is the first step in any successful mortgage bid.
- Only Spend 25% of Your Monthly Income on the Mortgage: An Ellie Mae report found that the best borrowers only spend a quarter of their monthly income no the mortgage. Anymore can risk falling into debt — or worse.
- Set Aside Closing Costs: Aside of a down payment, borrowers need to expect to pay other closing costs such as points. Any major purchases after a down payment could disrupt the mortgage process.
Finding the best mortgage lenders and deals is hard. By following these steps, however, you can be well on your way to the house (and mortgage) of your dreams. For more information about local mortgage lenders, feel free to leave a comment or question at the bottom.