Getting The Best Deal With A Mortgage Company
Unless you have money to pay cash for a new house, you are almost certainly going to deal with a mortgage company when you buy a new home. Mortgage companies are there to loan you cash in exchange for a lien on your new house, or to loan you cash in exchange for a second lien when you need more money to pay off credit card debt, to make home improvements, or to have more cash available. In today's low interest economy, there are lots of great deals available from mortgage companies. But you should still shop around. There are several ways to get the best deal from a mortgage company. Make a down payment as large as you can afford. The larger your down payment, the less money you need to borrow, and the less money you'll be paying interest on for the term of your mortgage. In addition, you'll have instant equity in your house; this means that if you have an emergency, you'll be able to get another mortgage to take care of any financial problems. Know what you're paying, and know what you're getting. You need to be familiar with fees charged by your mortgage company and, if you use one, by your mortgage broker. Ask them to calculate the amount of money you're actually paying back to them; add that to their fees and subtract your new home's value to find out how much your mortgage is really costing you. Also, you should know exactly what you want in a new home, and how much you can realistically afford to spend. Your real estate agent and your mortgage company can help you figure these things out; just don't be oversold. Shop around, even if you love your current bank or credit union. Once you know what your mortgage is really costing you, you have the information necessary to shop around to other banks and credit unions. Compare their rates with yours; see if there's a difference. Money is money, wherever it comes from; you should try to get the best deal possible, while still trusting the institution lending it to you. Ask lots of questions. No one has ever asked too many questions when buying a house. And they're the experts; you should learn as much about the process of getting a mortgage as possible. After all, it's your home, and it's your debt. Know your credit history. If you don't know what's going on in your credit, you don't have anything you can fight back with if you think your interest rates are too high, or if you are denied a loan. In addition, credit companies have been known to make mistakes - they make a lot of mistakes. If there are errors on your credit report that have a negative effect on your credit, it's going to impact your mortgage. Get errors fixed first, before going to a mortgage company. Ask if you can get a better rate if you clean up your credit. Sometimes you can take six months to clean up a few black spots on your credit report - debt you had forgotten about, or late payments that need to drop off - and get a much better rate from your mortgage company. It could make the difference between borrowing money at a prime rate or at a subprime rate - that's thousands of dollars. Don't be afraid to educate yourself. The more you know about mortgages and mortgage companies, the better your mortgage will serve you.
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