Doug asks…We will be in the market to purchase in three months. What can I do to ensure I get the best mortgage deal?

Congratulations on taking the first step – PLANNING!  Purchasing a home is a major life event and taking appropriate steps can really pay off.  Here are some great actions to help you make the most of your planning process:

  1. Know your credit rating.  You want to ensure you correct any errors and work towards paying down your debt.  With a score below 620 will find it difficult to qualify for a mortgage.  The best rates are available to those with scores higher than 740.
  2. Get pre-approved.  By qualifying for a mortgage, you will be a stronger buyer when the time comes.  Sellers will know your finances are strong and you will feel comfortable with your purchasing power limits.
  3. Choose fixed or ARM.  An Adjustable Rate Mortgage (ARM) offers a fixed rate for the first 5 or 7 years than can rise every year.  Determine how long you expect to be in the new house and choose the option best for you.
  4. Determine loan length.  Typically you can get a mortgage loan for 15 or 30 years.  You can get a lower interest rate by choosing the 15 year option, however, you have to be able to afford the higher monthly mortgage payment.  The benefit is you are free of a mortgage payment sooner.  However, typically home buyers need the 30 year mortgage to lower their monthly payment to fit in their budget.
  5. Lock your rate.  Once you find a rate you are comfortable with, lock it in!

Now is the time to do a credit review and make sure everything is in order so there are no surprises when you are ready to make an offer.  Utilize our FREE credit services review program  anytime. Contact us for more details.

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