|Securing Real Estate Mortgage
|Copyright 2007 Emerald Key Software
All Rights Reserved
Category Construction Glossary
If you want to make a large purchase such as a property purchase, you
will need to secure financing. If you're new to real estate, securing a loan
as large as a real estate mortgage can seem pretty intimidating.
However, there are several things you can do to help make the mortgage
process a little bit easier:
1) About a year before you start looking for a property, get serious about
your finances. Order your credit reports from the three major credit
bureaus, and go over them very carefully. Fix any errors that occur on
your credit reports, and make sure that you understand what your credit
score is. If you credit rating is low, start a serious plan to revamp your
credit rating as quickly as possible. This means paying your bills on time,
paying down any loans you currently have, and generally getting your
finances into shape. Your mortgage lenders will use your credit score to
evaluate your credit worthiness, so good credit score can help the land a
better real estate mortgage deal.
2) Decide what you can afford to buy. Now that you're getting serious
about your finances, use online mortgage calculators and make an
appointment with a loan officer from your bank to determine exactly how
much you can afford to spend on a real estate mortgage each month.
Aim to spend a little less than what you can afford, since you don't want
to be living paycheck to paycheck.
3) Start looking for down payment solutions. The larger your down
payment, the better deal you can generally secure on your real estate
mortgage. Having a large down payment is often an excellent incentive
for lenders to offer you a great rate. Therefore, start looking into assets
you can sell, savings you can access, and start putting aside money
every month so that you have a nice down payment -- at least 10%. Keep
in mind, too, that you may be able to borrow against your retirement
savings and your life insurance in order to buy a house. Look into these
options to see whether they make sense for you.
4) Start comparing lenders. Compare lenders in terms of not only the
interest rate they quote, but also the types of real estate mortgages
and the terms they offer. Don't be afraid to compare several lenders at
once, but be aware that each time you ask for a mortgage quote, your
credit score is pulled, and eventually this can lower your credit rating
slightly. Try comparing a few lenders or use a mortgage broker in order
to find great rates without affecting your credit rating. Keep in mind, too,
that even a few percent difference in interest rates can mean thousands
of dollars saved over the term of your loan, so don't be shy about asking
lenders to improve their offers. Once you find that ideal loan, lock it in
and get pre-approved so that you can go house hunting.