Check Your Credit Report



Get a copy of your credit report and look it over for mistakes. Often times, there may be entries made on it that were made erroneously. These potentially bad marks could reduce the likelihood of your getting a mortgage - even if you always pay on time. If you find bad marks, then talk to the people involved and work to get it settled - before you apply. If you find that your rating may not be as good as you had hoped, then you may want to think twice about applying at this time. Stopping to repair your credit and build it up will mean that you will be eligible for better rates, and larger loans, later.

Follow The Market

Keep an eye on the housing market and know what the mortgage rates are doing. They continually change, but you need to be aware of whether they are generally moving up or down. The timing of your application needs to be when the rates are low. If you are refinancing, then the rates should be at least one percent lower than your own - two is even better.

Know The Type of Mortgage You Want

The most common types are the fixed rate mortgage and the adjustable rate mortgage. The fixed rate mortgage keeps the interest rate and your payment always the same. On the other hand, an adjustable rate mortgage means that both change. Usually there is a fixed rate time period, but then the adjustable rate will kick in, and it will usually increase your payment. Before you get an adjustable rate, check to find out the history of interest rates over the past couple of years - it may reveal a trend that could change your mind about this type of loan.

Understand The Options

It is always best to be able to look at the contract and know what it is talking about. Be sure to understand the various options that could be on your contract, and see what may be eliminated. Don't be in such a hurry, or so excited about getting it, that you fail to read it before you sign it. Look for such things as PMI (Private Mortgage Insurance), early payoff penalties, and more. If you do not understand what it means - don't sign.

Compare Offers

Take a little time to look at various offers could save you thousands of dollars. Be sure to look at the various features of the mortgage by separating the loan from the numerous costs that are attached. This will let you see instantly who is adding on a lot more charges than the other company. Also, compare totals to see what it will actually cost you for the loan.