Getting a home loan is a long-term commitment. But, it's something many of us are more than willing to take upon ourselves. For one, it's an avenue which paves the way to the fulfillment of acquiring our very own dream home. On the other hand, it could also become our own worst nightmare if we are not able to do a bang up job out of it.
It could turn out like a really bad marriage, and you just can't bail yourself out of it. So, it's not unwise to be quite picky about getting into a mortgage deal, and try to be a little bit coy about it. So, here are some tips you might want to consider on how to find the right one for you.
1. Work out on giving a higher down payment.
As cited by the RealtyTimes, paying a bigger amount of down payment on your loan could translate to getting better deal. Lower initial deposits could be deemed as high risk applications by the lenders, and may result to paying more in the long run.
This could be asking too much, but BBC Business News advocates saving up for extra money to cover five percent more of the property value. This could really spell a big difference.
2. You may try to opt for a hybrid mortgage.
Nowadays, the usual mortgages lock you in a period of 30 years. But, for those who intend to eventually sell their properties, experts recommend trying out for a hybrid mortgage. RealtyTimes cites the example of getting a hybrid 5/1 mortgage for those who will sell their house within the next four years wherein they'll only pay an estimate of about 1 percent interest rate.
3. Factor in the private mortgage insurance.
If you have low home equity resulting from paying smaller down payment, lenders would ask you to pay for a private mortgage insurance for their security.
As was reasoned out above, paying more deposit initially could save you money, and it could also save you from paying thousands of dollars in insurance money if you shell out at least 20 percent according to the Realtor. It is important to consult with your lender about private mortgage insurance beforehand.
4. Check on your credit report first.
Todd Dal Porto, national sales executive for the Bank of America Home Loans, via Bankrate.com, advises to be mindful of your debts and other financial obligations. The credit that you have should not account for more than 20 percent of your income. "Always paying your bills on time is one of the best ways to maintain healthy credit", he added.
5. Shop sround for lenders.
Lastly, take your sweet time to look around for the right lender. Be picky and coy about getting a mortgage dea. Remember, it's not wise to settle on the first lender you come across with, as there could be others offering lower interests and fees. Realtor recommends the use of online tools to help you in the process.
