You should consider these important things when searching for the best mortgage deal:
- Get your credit in order. Lenders will look at your credit score when deciding what interest rate to charge. It is important that you maintain a high score and remove any delinquencies before you commit to a mortgage deal. Also, pay off collections and credit card balances before applying for a loan. And don't forget to take a look at your budget to make sure you can afford the monthly payment.
- While filing a loan application, be transparent. Don't hide credit problems and don't fudge information about income or assets. Trying to hide credit problems or holding back requested documents can work against you. If you are earning overtime pay, provide documentation for that extra income even if you won't be using those funds for the home purchase.
- A big down payment helps. If you make a large down payment, you can attract more lenders. Most loan programs allow contributions from family members or friends for down payment money, but they typically require such contributions to be accompanied by a gift letter asserting you won't have to repay the money.
- Repayment Terms: Choose between a fixed interest rate (this interest rate will not change throughout the loan period) and an adjustable rate (where the rate is low for the first five to seven years, and then adjusts to the average interest rate every year after your fixed term ends). But don't focus solely on getting the lowest interest rate. Evaluate your overall budget, monthly payments, and fees. A home loan is about getting the right mortgage with no surprises so that you can be a successful homeowner.
- Work with a lender you trust. Working with a trusted lender can save you many headaches in the long run. Make sure you check out your lender's mortgage lender reviews to see what real clients are saying about the company. This is an important pre-requisite for a good mortgage deal.
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