Mortgage Financing
5 Things to Keep in Mind
Getting the right mortgage is much More than just getting a loan, because it has an impact on wealth building, retirement and other strategies in personal finance. Here are five critical things prospective home buyers need to know about getting a mortgage.
1.Make a down payment - More favorable loan terms are available to consumers who can put at leas 5% down.
2. Be smart when shopping for interest rates - A higher interest rate may not include fees, and a lower rate may include fees that elevate the actual financing cost.
3. Consider paying more for your house - Instead of negotiating a reduction in the sale price, ask the seller to pay for the costs to “buy down” the interest rate on the loan. This can substantially reduce the monthly payment, saving cash flow in the short run and increasing your principal balance over the long haul.
4. Improve debt-to-income ratio – The higher your total outstanding debt compared to your total income, the less likely you are to be approved for a loan. For the best loan terms, work to keep your debt low.
5. Improve credit scores – Check your credit report and get errors corrected a, get rid of liens, and resolve any late payment issues for a quick and positive impact on your credit score.
