Finding The Right Mortgage

By: J Harris

If a home buyer is looking for a home loan, otherwise known as a mortgage, there are a few things they should know. The rates differ depending on where they reside. The rates in San Diego may be different than the rate is Boston.

A good way to find mortgage is to determine what type of loan is desired and let multiple lenders compete to give the lowest mortgage rate. It is always a good idea for the prospective buyer to estimate how much mortgage he or she can afford prior to going in.

Be sure to shop for the best deals and check the interest rates and fees. Get lots of bids from banks and brokers before settling on one company.

Prospective buyers should always have their credit histories checked and can do this for free at sites such as , , or

Never spend too much money on a home. Figure out what expenses are and calculate a reasonable mortgage payment from there. Do not buy a home bigger than calculated budget. I good rule of thumb is to buy a home where your loan payment and monthly property insurance and taxes fall under 30% of your GROSS monthly income.

Get pre-approved for a loan. Most lenders will do this for free. The lender will look at the prospective buyer's income, savings, credit history, debts, and figure out a loan from that. Also, be aware that taking out a loan that makes monthly payments higher than necessary is avoidable. Get a fixed-rate loan instead which will have the same monthly payments for the life of the loan.

Always plan for the unexpected like natural disasters, as well as deaths, layoffs, and illnesses. Be sure to have enough insurance to live three to six months without a paycheck. In addition, keep in mind that maintenance costs such as monthly bills and home repairs will have to be added in.

For a prospective buyer to get the best mortgage, it's best to be proactive. Pay off bills quickly and don't skip payments. Make a larger down payment on the home so the buyer will not look like they may default on the loan.

Pay off debts and purchase a home that one can afford. It shouldn't take up more than 30 percent of gross household income on house payments. It can be stretched to 40 percent, but the more that the buyer has to borrow, the more he or she will be perceived as a higher risk or and the rates will be higher.

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