Will you be buying a new home in the near future? Are you planning to refinance your current mortgage? These tips can eliminate some big headaches, and save you thousands of dollars as well.
An Ounce of Prevention
Do you plan to purchase a home soon? Are you thinking of refinancing your mortgage? These tips could end up saving you thousands of dollars. You will probably spare yourself a few major headaches as well. You work hard for your money. Now is the time to make that extra effort to insure that you get the best home mortgage that you can!
Curb Your Spending
Nobody likes to hear this one, but there are a few big reasons to cut off all unnecessary spending in the months before applying for a new mortgage. Your credit score will have a significant impact on the mortgage that you qualify for. And almost any use of your credit cards will put your scores at risk. Higher balances relative to your high credit limit will reduce your score. Please don’t apply for new credit. Now is not the time to opening a new MasterCard or Visa. And new department store cards are virtual credit suicide. Do yourself a favor and wait until your new mortgage closes before opening your wallet.
Count Your Money
The last thing that you want to do before applying for a mortgage is to erode your savings. If you are buying a home you want to make sure that you have all of the money that you need for your down payment. Are you making less than a twenty percent down payment? Chances are that your mortgage will require private mortgage insurance (PMI). Did you know that every additional five percent you can put down will reduce your private mortgage insurance rate? The lower your PMI rate the lower your monthly cost. As home prices have increased in recent years monthly PMI payments have become more and more significant. Don’t be taken by surprise. In addition, many mortgage programs require that you have a certain amount of savings left after closing. Now is the time to hold on to your cash.
Getting a Gift? Get It Now
Are you getting a gift for your down payment? Consider getting it now. Most mortgage programs allow gifts. But many programs require that you document that a certain amount of money has been in your account for a minimum of sixty days. This is commonly referred to as a seasoned funds requirement. You don’t want to find out at the last minute that you are short of seasoned funds. Getting your gift funds at least sixty days in advance has the additional benefit of eliminating the need for a gift letter and other possible documentation from your gift donor. They too might appreciate your careful planning.
Check Your Credit
Now is the time to check your credit. Go through all three of your credit reports very carefully. Check every line. You need to check neutral items like high credit limits and account opening dates as well as derogatory items. Are there errors? You may need at least sixty days to fix them. The credit bureaus don’t always cooperate. Does the task of checking your credit reports seem intimidating? I suggest that that you hire a reputable credit repair company. Reputable credit repair companies should be very affordable and should never make you sign up for a pre-determined block of time. When it comes to your credit it pays to consult an expert.
Know the Facts
If you plan to get a mortgage in the next several months now is the time to call your friendly mortgage broker. You don’t want to be scrambling at the last minute to make sense of your closing costs or loan programs. Don’t be taken by surprise. Your mortgage broker should be happy to provide a detailed Good Faith Estimate and discuss your closing costs, interest rate and payment information with you. Ask about all of your options. Make sure that you have every detail. If you are not comfortable with your mortgage broker find another one that will give you the service that you deserve. Be Prepared
I have been a Florida mortgage broker since 1989. I am also licensed in Georgia, Massachusetts, and Virginia. I am always happy to speak to a potential customer about preparing for home financing. In my experience, almost without exceptionHealth Fitness Articles, borrowers that think ahead and make the extra effort end up saving a significant amount of money. Your mortgage may be the largest financial transaction on your life. Do the right thing for yourself. It’s your money!
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
ABOUT THE AUTHOR
Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida. Power Mortgage Corp was established in 1989 and serves the states of Florida, Georgia, Massachusetts, and Virginia. Jim is also the President of Sky Blue Credit, a national credit repair business.
