Five Quick Mortgage Tips

If this is the first time that you are shopping for a mortgage then you may be overwhelmed by the amount of information and advice that is offered online. However, it is important that you educate yourself about mortgages and the home financing process. To get you started on the right foot here are five quick mortgage tips to help you out.

Tip # 1 – Know How Interest Impacts Your Mortgage Payment

Interest is one of the most important features to look at when shopping for a mortgage. Even a half point difference in interest rates can cost you, or save you, tens of thousands of dollars over the life of your loan. To get the best rates, you need to shop around and compare rates offered by different lenders.

Tip # 2 – Know How the Term of Your Mortgage Impacts Your Mortgage Payment

The second factor that impacts the cost of your mortgage is the term that you select. The longer the term that you select for your mortgage the lower your monthly mortgage payment will be. However, longer mortgage terms will also slow down the rate that you earn equity in your home. Because of this it is in your best interest to select the shortest mortgage term that you can afford.

Tip # 3 – Use a Mortgage Broker

If you are a first time home buyer, using a mortgage broker is the easiest way for you to find the best mortgage for your situation. Mortgage brokers have access to a wider array of mortgage programs, and they may be able to assist you at finding a lender. A mortgage broker is especially useful if you are self-employed or if your income includes tips and commissions instead of a regular paycheck.

Tip # 4 – Know How to Qualify for a Bigger Home

There are several tricks that you can use to qualify for a bigger home. The first way is to use a no doc mortgage. These mortgages don't require you to "qualify" for a specific loan value; however, you do have to have a credit score of at least 700 in order to qualify for this loan type. Another option is to select a longer term loan like a 50 year mortgage. This will lower your monthly payment and allow you to qualify for higher valued homes.

Tip # 5 – Avoid Adjustable Mortgages

A lot of lenders try to push adjustable rate mortgages on their clients. However, you should try to avoid this mortgage product if at all possible. For most people ARMs just don't make sense. If you are having a hard time finding an alternative mortgage then you should try using a mortgage broker. They should be able to find a fixed rate mortgage that you will qualify for.