Choosing a Mortgage - Tips and help on picking a mortgage

Choosing a Mortgage

      Other Mortgage articles:

           - Choosing a Mortgage
           - Types of Mortgages
           - What are Mortgage Points?
           - Refinancing

Before you get too far into what type of mortgage you need, we have a few basic pieces of advice that may help when choosing a mortgage:

1) Don't spend too much! It is in pretty much everyone's interest except yours to get you to buy a big house with a huge mortgage. Both the realtor and the mortgage broker will make more money the larger loan you assume. Their advice on how much home you can afford is not worth much.

2) Be very careful about ARMs. Adjustable mortgages have caused much grief to families over the years when the economy goes south and their mortgages rise. This can be a double whammy. ARMs can be good in some cases. The best example is when you are sure you are going to move before the ARM can adjust and go up. This way you can get a lower rate for the time you own the home, but be careful and plan accordingly.

3) Be even more careful about interest only mortgages. We don't see any reason why anyone would get an interest only loan. Getting an interest only mortgage usually means you are trying to buy more house than you can afford�..see #1 above.

4) Get multiple quotes. Don't just go to one mortgage broker that your realtor recommended. They may be great, but be sure to get a few more quotes from reputable mortgage companies and brokers. The prices aren't necessarily fixed and a little competition can save you some money.

5) Consider discount points if you plan to live in your house for a long time. It will take more cash up front, but should save you money over the long run.

6) Do what you can to improve your credit report. Often you can get better rates or loan terms when you have better credit. Also, be sure to read over your credit reports and make sure they are accurate. Many times there are mistakes made by the credit report companies and this can adversely affect your mortgage terms.

7) Consider putting 20% down so you can avoid PMI (private mortgage insurance). PMI will add to your monthly payment. If you are close to being able to put 20% down on your mortgage, you might want to consider a less expensive home so you can get there and lower your monthly payment.

Mortgage Software and Calculator Pages:

Other Mortgage articles:

           Choosing a Mortgage
           Types of Mortgages
           What are Mortgage Points?
           Refinancing