Mortgage Regulations Have Changed...
Mortgage regulations have changed significantly over the last few years,
options wider than ever. Subtle changes in the way you approach mortgage shopping,
and even small differences in the way you structure your mortgage, can cost or save
you literally thousands of dollars and years of expense.
Get the Right Information
Whether you are about to buy your first home, or are planning to make a
move to your
next home, it is critical that you inform yourself about the factors involved.
Industry research has revealed that there are 6 common mistakes that
most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this
critical negotiation. If handled correctly, these issues could result in a mortgage that will cost
you less over a shorter period of time.
6 Things You Must Know Before
Before you commit your hard earned dollars to monthly mortgage payments,
6 issues. Effective consideration of these important areas can make your payments work much harder for
1. You can, and should, get preapproved for a mortgage before
looking for a home.
Preapproval is easy, and can give you complete peace-
of-mind when shopping for your home. Your local lend-
ing institution can provide you with written preapprov-
al for you at no cost and no obligation, and it can all
be done quite easily over-the-phone. More than just a
verbal approval from your lending institution, a written
preapproval is as good as money in the bank. It entails
a completed credit application, and a certificate which
guarantees you a mortgage to the specified level when
you find the home you’re looking for.
2. Know what monthly dollar amount you feelcomfortable
When you discuss mortgage preapproval with your
lending institution, find out what level you qualify for,
but also pre-assess for yourself what monthly dollar
amount you feel comfortable committing to. Your situa-
tion may give you a preapproval amount that is higher
(or lower) than the amount of money you would want
to pay out each month. By working back and forth with
your lending institution to determine what this month-
ly amount is, and what value of home this translates
into at today’s rates, you won’t waste time looking at
homes that are not in your price range.
3. You should be thinking about your long term goals, and
situation, to determine the type of mortgage that will best suit your needs.
There are a number of questions you should be ask-
ing yourself before you commit to a certain type of
mortgage. How long do you think you will own this
home? What direction are interest rates going in, and
how quickly? Is your income expected to change (up
or down) in the near term, impacting how much money
you can afford to pay to your mortgage? The answers
to these and other questions will help you determine
the most appropriate mortgage you should be seeking.
4. Make sure you understand what prepayment privileges and
frequency options are available to you.
More frequent payments (for example weekly or bi-
weekly) can literally shave years off your mortgage.
Simply by structuring your payments so that they
come out more frequently, will significantly lessen the
amount of interest that you will be charged over the
term. For the same reason, authorized prepayment of a
certain percentage of your mortgage, oran increase in
the amount you pay monthly, will have a major impact
on the number of years you will have to pay and could
shorten your payment term considerably These two
payment options can cut years off your mortgage, and
save you thousands of dollars in interest. However, not
every mortgage has these prepayment privileges built
in, so make sure you ask the proper questions.
5. Ask if your mortgage is both portable and/or
A portable mortgage, where available, is one that you
can carry with you when you buy your next home and
avoid paying any discharge penalties. This means that
you will not have to go through the entire mortgage
process again unless you are making a move up to a
much more expensive home. An assumable mortgage
is one that the buyer for your home can take over when
you move to your next home. This can be a very pow
erful tool at the negotiating table making it much easier
and more desirable for a buyer to buy your home, and
again saves you any discharge penalties.
6. You should seriously consider dealing with a
Consider dealing only with a professional who special izes in mortgages. Enlisting their services can
make significant difference in the cost and effectiveness o the mortgage you obtain. For example
can mak the process faster thereby avoiding costly delays. Typi cally there is no cost or obligation
Not intended to solicit property currently listed for sale. Copyright© Craig Proctor Productions