If you have a good credit score and are looking for a mortgage loan, you may be able to get lower interest rates. But don't assume that you will only be able to get a costly loan if you have bad credit because you were sick or temporarily out of work. You can tell your lender what's going on, and it's more likely that you'll get a cheaper home loan. The key is to be open to the different kinds of mortgages that are out there and to be willing to negotiate. Before you apply for a loan, you should check your credit score with one of the three credit rating agencies—Equifax, TransUnion, or Experian—to see where you stand.
In fact, banks, thrift companies, mortgage companies, and other financial institutions offer home loans and mortgages. You can also find a good deal on a home mortgage at a credit union. Look for the best deal by shopping around. Find out about the home mortgage plans offered by different banks. You can always bargain to get the initial payments, fees, and other costs with different names to go down.
Using a mortgage broker costs more money because they get paid a commission, but it is a good idea. This kind of broker knows about the interest rates, fees, and other costs that come with different home mortgage plans and can put you in touch with different lenders. Most of the time, negotiating with a mortgage broker can also bring down the interest rate. A decrease of 0.5 percent or even 0.25 percent can make a difference in your monthly pay, which adds up to a good bit in a year and a lot by the time you finish paying off the loan. But you don't have to give the money to anyone or any company. Instead, look for the lowest interest rates, monthly payments, and small or no late payment fees.
When you apply for a home loan, private mortgage insurance (PMI) is a good idea to look into. This is a way for the lender to make sure they don't lose money if you don't pay back the loan. When you take out a loan for more than 80% of the property's appraised value, you need PMI. This will, however, make it easier for the lender to give you the loan you need to buy a house. You can then make up for any drop in your credit score while you have the loan. But you have to keep paying the monthly PMI terms until you own 23% of the total equity, or until you pay 23% of the total value of the property. The mark is not 20%.
All rights reserved. Copyright (c) 2006 Joel Teo. (You may publish this whole article as long as you include the following author's name and only live links.)
