Are You Ready for a Home Mortgage Loan?
Buying a Home and committing to a Mortgage can be very scary! A home mortgage loan is the largest debt that most Americans will take on in their lifetime. As such, making the decision to take out a mortgage is not one that most first time homebuyers take lightly. Not only will your monthly mortgage payments probably be the largest bill that you face each month, but the total amount of debt realized with a home mortgage loan can have a staggering, and sobering effect on the first time home buyer.
I can remember the months leading up to my decision to fill out a mortgage application. I had nightmares about loosing my job, not being able to keep up with my payments and finding myself homeless. And those were on the good nights when I was able to sleep at all!
Committing to a Home Mortgage Doesn't Have To Cost You Your Sleep Get the Best Rate on Your Home Mortgage Loan
Home mortgage interest rates hit record lows in 2004 and have remained at record lows as we go through 2005. It is possible today to get a thirty-year fixed rate home mortgage loan for under five percent, and an adjustable rate mortgage can be found for under four percent if you look hard enough!
However, record low mortgage rates do not mean that you should take the first mortgage offer made to you, even if it sounds low. On the contrary, it means that shopping around for the best mortgage possible may be even more beneficial then during a high market period.
If you solicit mortgage rate quotes from enough lenders and pay attention to economic news, you might be able to secure a home mortgage loan at an interest rate that you will not see offered again in your lifetime.
Solicit Several Mortgage Rate Quotes
In order to get the best deal on anything in America, it is important to shop around. Securing a home mortgage loan is no exception to the rule. If you are the type of consumer who likes to walk into the first store that you see and buy what you need without comparing your options, then you might also be inclined to accept the first home mortgage loan offered to you . Doing so would be a big mistake. In order to get the best possible home mortgage loan you will need to "shop" and compare lenders. Having a substantial down payment on the home that you wish to purchase and applying for a smaller home mortgage loan is another way to increase your chances of getting mortgage approval. Again, this goes back to the risk involved to the lender for financing your loan.
Many mortgage lenders will require that you have a 20% down payment on the home, and then they will grant mortgage loan approval for the remaining 80% of the purchase cost. This helps to offset the lender risk. In the event that you are unable to keep up with monthly mortgage payments and you default on the loan, the lender will have a better chance of recovering his money through foreclosing on and selling the home if the loan is a smaller percentage of the market value of the home.
Therefore, if you can save 30% or more towards a down payment on your home, you will be lowering the risk to the lender and increasing your chances of getting mortgage approval.
You May Have To Accept a Higher Interest Rate on Your Mortgage Loan If you wish to secure a mortgage despite your bad credit history, and you do not have a sizeable down payment saved up, you may have to agree to a mortgage at a higher interest rate than that which is being offered to low risk borrowers. This is because the lender will want to be compensated for his increased risk level. This should not necessarily prevent you from taking the loan, though. If you secure the mortgage and are diligent about making timely payments, after paying on it for awhile you will improve your credit history. Then you can refinance the mortgage at a later date with a better rate offer.
Michael Contaro
http://www.atozonline.com
For more articles by Michael Contaro, you can go to http://www.atozonline.com
Latest News
When refinancing mortgage makes sense Chicago Tribune, United States - But you don't have to be in financial trouble to benefit from mortgage refinance, real estate experts say. "At this point, there are thousands of good ... |
 Boston Globe (registration) | Center for Responsible Lending and Industry Groups Urge HUD to ... MarketWatch - ... to help the largest possible numbers of at-risk borrowers. This is not the appropriate time to permit the lapse of a viable mortgage refinance option. HUD Said to Entice Banks to Enter Foreclosure Program (Update1) Major Revamp Of Two HUD Mortgage Relief Programs To Be Pushed Tips On Saving Your Home From Foreclosure |
 The Money Times | Mortgage Applications Fall VillageSoup Belfast, USA - Mortgage rates were down slightly, so most of the decrease was in mortgages to purchase homes. The refinance index increased 2.6 percent, while the purchase ... HOUSING: Mortgage applications among buyers dip US MBA’s Mortgage Applications Index Decreased 6.2% Last Week Mortgage Applications Down 6.2 Percent; Near 8-Year Low |
Should you refinance your mortgage? Vail Daily News, CO - Many homeowners are finding it increasingly difficult to afford the mortgage payments on the loans they have taken out in the last several years. ... |
 Los Angeles Times | Nehemiah Applauds FDIC Chair Sheila Bair for Calling Attention to ... MarketWatch - Further, distressed families could easily refinance out of risky adjustable rate mortgages into low-interest, fixed FHA mortgages using DPA. ... Should Obama name FDIC's Bair as a Special Advisor for Mortgage ... FDIC Revises Proposal to Refinance Troubled Loans New Year US Housing Market Forecast: No Gain, More Pain |
Now Available Again: Stated Income - Verified Assets (SIVA) Real ... PR Web (press release), WA - As a full-service residential mortgage lender, Katz Mortgage Team specializes in residential mortgages, mortgage refinancing, adjustable rate mortgages ... |
Foreclosure mediation, relief for the 'little guy' Minneapolis Star Tribune, MN - ... on their 2006 mortgage adjusted up from 6.53 percent to 10.35 percent. That raised their monthly payments from $1800 to $2600. They couldn't refinance, ... |
Rell announces: homeowners reducing monthly payments TownTimesNews.com, CT - ... November 13, announced that Connecticut homeowners using the refinancing program she created last December in response to the subprime mortgage crisis ... |
Refinancing Borrowers Choose Safety of Fixed-Rate Mortgages DSNews.com, TX - ... prime borrowers who originally had a 1-year conforming adjustable-rate mortgage (ARM) chose a new conforming fixed-rate mortgage when they refinanced. ... |
Capmark Finance Originates $23425000 for Refinance of Autumn Chase ... PR Web (press release), WA - Capmark has three core businesses: lending and mortgage banking, investments and funds management, and loan servicing. Capmark operates in North America, ... |
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